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Tuesday, October 1, 2013

Settlement Loans & What They Mean for Your Case by George Tofaute

CAN I BORROW MONEY ON MY CASE BEFORE IT IS SETTLED?  Lawyers individually are prohibited by ethics to loan money to a client on their their case.  To do so means the attorney has "acquired an interest in the case," which is a conflict of interest prohibited by the courts.   

But, you may be able to borrow from some companies who specialize in such loans, like JG Wentworth, Oasis Legal Funding, and others.  If you qualify with them for a loan, both you and your lawyer must sign a re-payment agreement. Most lawyers will do so if you, as the client, want them to.  

However, before signing BE SURE YOU KNOW HOW MUCH YOU WILL BE REQUIRED TO RE-PAY.  The interest rates on such advances are usually very HIGH!  Read the fine print!!   Your lawyer can help you see if you really do want such a loan, even if the re-payment is quite expensive. 

Some good news: most such loan agreements have a provision that if you do not win your case, you may not have to re-pay the loan.  Again, read the "fine print" to see what you are obligated for before do the transaction. 

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