Are You Considering A Pre Settlement Cash Advance?
The battle during a lawsuit can be overwhelming. There are many challenges that you will face during this period. If you were injured and unable to work for some time, you might want to consider requesting a pre settlement cash advance before a verdict will be declared. However, just like with every other cash advance, a pre settlement cash advance has advantages and disadvantages. It is important that you ask your attorney what these are and review your funding options before you take the next step.
How A Cash Advance Works
1) It Gets You Going
A cash advance provides an immediate solution for those in need of financial aid during a lawsuit. It doesn't just apply to personal injury cases. It can apply to any lawsuit from loss of property to defamation lawsuit. The point is that it is a good funding option for you if you are waiting for a lawsuit settlement.
2) A Cash Advance Is Not A Loan
The first thing you should know is that there is a difference between both terms. A cash advance is sometimes used as an alternative to a loan that provides security to the client. You can think of a cash advance as insurance for your lawsuit. They are better than loans because you will not be required to pay back if you lose your case. It covers for any unforeseen event during the waiting period. This is different from a loan. When you request a loan as a financial aid pending the results of a lawsuit, you will have to pay back whether or not you win the case. Loans are not just paid back but paid back with interest. This isn't the case with a cash advance.
3) It Gives You More Options
With a cash advance, you'll be able to work with your attorney to critically analyze the situation and demand a good settlement amount from the plaintiff. If you are short of cash, you may be tempted to accept a poor offer and settle out of court. However, with a cash advance, you will be able to carefully weigh your options since the immediate need for cash will be eliminated.
4) The Amount Varies
The amount you will receive from a lender if you request a cash advance varies from case to case. While some might be enough to take care of short-term expenses, others might be enough to last you long term. A cash advance can be a substantial part of your settlement money. However, you will be required to pay back with interest, and the interest will vary depending on the duration of the case and the amount that was given to you as an advance. If you are unlucky, you will end up paying more than what you received as settlement money back to the lender. This is why you shouldn't accept a pre settlement cash advance from a lender that offers huge sums of money upfront. This allows you to keep the bigger portion when your lawsuit is settled.
Note that not everyone can qualify for a pre settlement lawsuit. A lender will consider you for a suit based on your level of financial risk. You should only seek a cash advance when you have no other funding option, and you are in need of cash.