Car accident legal funding vs. personal loans could be hot-button topics for plaintiffs seeking financial assistance. Both choices have their pros and cons, but which is the right option for you? As one of the leading lawsuit funding companies in NYC, our team at Apex Legal Funding, LLC, is here to break down how auto accident lawsuit loans work.
Discover how they compare to personal loans and use this guide to make an informed decision. Don’t hesitate to reach out to our lenders if you’re curious about your options.
The Scope of Car Accident Lawsuits
In 2023, American healthcare professionals treated 5.1 million injuries due to motor vehicle collisions, according to the National Safety Council. Common injuries include lacerations and whiplash, though serious crashes could leave victims with traumatic brain injuries, limb loss, or spinal cord damage. Victims may pursue legal action and try to recover damages for their:
- Medical costs
- Lost wages
- Damaged vehicle or property
- Emotional distress
- Diminished quality of life
Filing a lawsuit after a car accident in New York could be an option for injured parties, but only if they file before the statute of limitations. State law says that plaintiffs have three years from the date of an accident to file a lawsuit.
Once they have a lawsuit pending, it could be several months or even years before the case reaches a resolution. According to The Law Dictionary, 95% of personal injury cases end with a pre-trial settlement, though this outcome is never certain.
As plaintiffs let the case play out, their expenses don’t stop, and they may need financial assistance.
The Basics of Motor Vehicle Case Funding
After a car accident, legal funding can be a worthwhile avenue for victims. How does pre-settlement funding work? The process involves the following steps:
- Plaintiffs submit an application to a lender like Apex Legal Funding, LLC.
- Lenders review the details of the personal injury suit with the plaintiff’s lawyer.
- The lender can either deny the application or take an interest in the case and approve the victim.
- Upon approval, the plaintiff will receive funds based on their potential settlement amount.
- The plaintiff can use this money for necessary expenses and repay the lender if their case ends with a settlement or other financial reward.
How a Lawsuit Cash Advance Compares to a Traditional Loan
Is car accident legal funding better than taking out a personal loan? There are pros and cons to seeking a car crash legal advance.
Notable differences between the two include:
- Potential applicants: While several borrowers can seek a traditional bank loan, pre-settlement funding is only available for plaintiffs in a pending lawsuit.
- Credit requirements: Lenders often evaluate an applicant’s credit score for a traditional loan. With legal funding, the applicant’s credit score isn’t relevant to the decision.
- Repayment: Traditional borrowers have to pay their loans back over time with interest. Plaintiffs receive non-recourse loans, meaning they must only repay lenders if they recover damages.
- Risk: Lawsuit funding has more risk since lenders may not recoup their money, depending on the plaintiff’s outcome.
How Lenders Calculate Pre-Settlement Funding
You might be wondering, “How much could I receive for car accident legal funding?” The answer depends on the strength of your claim and your maximum damages. To calculate your cash advance, lenders evaluate essential case documents, such as:
- Police reports
- Witness statements
- Hospital bills
- Property damage estimates
This helps them assess the plaintiff’s case and their chances of recovering compensation. Receipts, bills, and other documents allow lenders to calculate what the suit could settle for.
Many lenders only distribute up to 20% of the potential settlement. According to Martindale-Nolo Research, the average car accident compensation for injured victims is $29,700. Using this example, a plaintiff may receive roughly $5,940 from their lender, or 20% of the possible payout.
For victims with severe injuries, their potential damages may be higher. This could be due to more extended hospital stays, extensive rehabilitation costs, and a diminished earning capacity.
Need Financial Assistance During the Legal Process? Contact One of the Leading Lawsuit Funding Companies in New York
Not everyone can secure car accident legal funding. However, those who are eligible may prefer this option over a traditional loan.
Contact Apex Legal Funding, LLC, to see whether you’re eligible for a cash advance. Our team understands that even if you’re awarded compensation in a lawsuit, your expenses can continue to pile up before receiving a check. That’s why we offer non-recourse loans.
If you’re looking to receive a cash advance, check out these crucial things to know before applying for legal funding. Then, contact us online or call 1-800-377-4934.
Frequently Asked Questions
As one of the premier lawsuit funding companies in New York, we receive a lot of questions about accident injury legal loans. We break down some common topics and concerns below.
How Does Pre-Settlement Funding Work?
Pre-settlement funding provides cash to plaintiffs if a lender takes an interest in their case and believes they could recover damages based on evidence. They may only need to repay the lender if they win their case or agree to a pre-trial settlement.
Do Pre-Settlement Funding Companies Help Victims Without a Lawyer?
No, many pre-settlement funding companies require applicants to have legal representation. Lenders often communicate through the plaintiff’s lawyer.
How Much Funding Can I Receive for My Case?
Legal funding amounts vary for every individual. Lenders look at the case’s evidence and total maximum damages. They may grant you up to 20% of a potential total settlement amount.
Can Other Types of Plaintiffs Apply for Lawsuit Funding?
Yes, at Apex Legal Funding, LLC, we accept applications from plaintiffs in various personal injury cases. Our past clients include victims of motor vehicle crashes, construction accidents, medical malpractice, and dog bites.
What Can You Use Car Accident Legal Funding For?
You can use car accident legal funding to cover any necessary expenses, such as food, housing, utilities, childcare, and more.
