We Know: All About Cash Advances on Your Lawsuit

What? I Can Get Cash Before My Suit Is Settled?

If you have a lawsuit of real merit, there are a number of companies that will advance (not loan; in most states loans on the outcomes of lawsuits are illegal) you a sum of money against the outcome of your lawsuit. They do charge a significant fee for this service, but if you do not lose your lawsuit, you do not have to pay back the cash advance.


This is of immense value to someone bringing a lawsuit, even though you'll have to pay a hefty fee. Many companies will delay settling a lawsuit for as long as possible in order to force the plaintiff to settle for significantly less than they are entitled to. Plaintiffs need money, now, and insurance companies and lawyers know it. With a cash advance company, you can regain your cash flow without losing half or more of your rightful settlement.

What should I be careful of?

Because of professional restrictions, your lawyer is barred from telling you about cash advance companies or how to find one. If your lawyer starts talking about this to you, find another lawyer immediately! It's a conflict of interest.


Read the whole contract from your cash advance company, and ask your lawyer to read it as well. He can help you avoid serious pitfalls. He will already be familiar with your situation, as the cash advance company will contact him to review your case prior to offering you a contract.

How do I find a legal cash advance company?

Most cash advance companies advertise in the Yellow Pages; others advertise online. By searching for "legal cash advance," you can find dozens. Before signing with one company, contact several and ask each to give you an offer. There can be significant differences between different companies' terms.


The best companies to go with are those that work with your lawyer to get their payment out of your escrowed settlement, and who also purchase structured settlements.

What Else Should I Know?

Never take more money from a legal cash advance company than you must. Remember, every dollar that you borrow from them means a dollar and a half you'll have to pay them back out of your settlement, assuming they charge a standard one-third fee for their services. Ideally, you should take what you need right now, but leave a loophole in the contract so you can borrow more later if you must, at the same rate you're borrowing right now.


Legal cash advance companies are not covered by usury laws. Don't expect to be able to take their money and then sue them because of their "unfair interest rates." It won't happen.


If you live in Ohio, you may not be able to find a legal cash advance company; the laws there are changing, and they may eventually be illegal in that state.



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