When most people or businesses face legal matters, they usually have to deal with a substantial cost to fight for their rights. Litigation issues are unpredictable. No one knows how much money or time it’ll take to get a fair settlement of them. Alongside that, other legal costs can pile up your overall spending. Well, you can address these financial challenges with two primary options, i.e., litigation finance companies and traditional financing for legal disputes. Both these can help you finance your litigation matters by providing you with capital.
But what would be the best option for financing your legal issues? Let’s find that out in the below blog post.
What are the basic differences between traditional and litigation finance companies?
Both traditional financing and litigation finance companies can fund your legal matters and help you get better legal assistance from professionals. But some basic differences among them can help you understand what would be the better thing to finance your legal matters.
Here’re some differences between traditional financing and litigation finance companies,
1. Traditional financing options for legal issues offer funds for litigation from various sources like personal savings, borrowing from banks, credit cards, loans from friends or family and financial institutions. But litigation finance companies allow you to fund your legal matters through a 3rd party by securing a non-resource cash advance from specialised financing companies.
2. Though traditional financing options are widely available across the nation, it’s a must for the claimants to pay back the entire amount along with the interest after a certain period. However, professional litigation finance companies offer a non-resource mode of funds where the claimants aren’t obliged to pay if they lose the case.
3. Most traditional financing options for legal disputes offer funds to cover most of the legal expenses. However, proficient litigation finance companies offer a flexible way of funding that covers not only the legal costs but also medical bills, living expenses and/or other required costs of the claimants.
4. Traditional ways of financing can impact the credit score and history of the borrower. Late payments on credit cards or loans can negatively impact their credit. Professional litigation finance companies don’t appear on the credit reports of the plaintiffs. It doesn’t consider a traditional debt. Hence, a loss in the legal case doesn’t bring any negative impact on the plaintiff’s credit.
5. Getting traditional financing for legal disputes can be time-consuming. You may have to wait longer to get the approval for credit cards and/or loans to fight for your rights. Adept litigation finance companies offer you faster approval processes, unlike the traditional way of legal funding. All you’ve to deal with is the assessment of your legal matters. Once your funder analyses your litigation, they’ll finalise the financing processes.
6. Borrowing funds from traditional financing sources can be expensive, especially when the interest rates are higher. The rate is varying based on the type of loan or credit card you’re applying for. Alongside that, the duration of the litigation process would significantly add up to your financial burden. Professional litigation financing firms are cost-effective and stress-free because the funding is non-resource.
What should you choose to finance your litigation matters?
Since we’ve discussed both types of financing options for legal disputes earlier, it might spark questions in your mind. You may feel confused about which type of financing you should choose for your litigation.
Well, professional litigation funding companies allow equal access to justice for everyone while traditional financing companies don’t do that. By assessing the litigation, the funders come to the facts about what would be the best financing options for your litigation. Alongside that, the rates for litigation financing are lower than the traditional financing options. Hence, litigation financing would be the best option for litigation.
Final thought,
Can’t decide on how to finance your litigation matters without sufficient money in your hands? Instead of traditional financing options, you can think of getting help from professional litigation finance companies. We hope this blog post will be helpful for you.
Author Bio: The Author runs one of the leading litigation finance companies in Australia. For years, he’s helped many people to fund their legal cases through 3rd parties. Also, he’s written many articles and blogs on the same.
