Receiving a judgment doesn’t depend on whether or not someone owes you money; rather, it depends on what amount is awarded by the court.
Lawsuit loan companies target plaintiffs involved in personal injury suits such as traffic accidents or medical malpractice lawsuits as their main customer base, marketing their products as non-loans under the pretense that laws don’t apply.
Insurance Company
Third-party litigation funding has grown into its own industry in recent years. Not only is it an important source of income for attorneys, but its rise also explains why consumer insurance rates are skyrocketing.
Plaintiffs typically receive compensatory damages that put an objective dollar amount to how badly they have been injured by another. This could range from being denied access to their car or having difficulty walking – often paid by the defendant’s insurance company.
Some plaintiffs who find themselves financially strapped while waiting for their case to settle or go to trial find themselves vulnerable during this waiting period, which often leaves them vulnerable against lawsuit lending companies that offer “lawsuit loans” or settlement cash advances. Some consumer advocacy groups support lawsuit lending, while other oppose it because it encourages litigation by encouraging plaintiffs to hold out for higher settlements; as a result, some states and cities have banned this form of financing.
Employer
Employment lawsuits continue to dominate courts’ dockets, prompting many employers to look for ways to help cover costs associated with legal defense funds for employees who face charges or lawsuits.
Lawsuit loans may also be an option; however, they can be quite costly due to being unregulated federally and incurring fees and interest payments that could double or even triple your amount borrowed.
Plaintiffs who take out lawsuit loans often have to repay them out of any future settlement or award proceeds, prompting consumer advocacy groups and chambers of commerce to oppose and advocate for regulation of this industry. Furthermore, lawsuit lending encourages litigation by giving plaintiffs more time to fight out for larger settlements.
Judgment-Proof Person
A judgment-proof individual does not possess income or assets that could be taken to pay their debts. Typically, this classification applies to elderly or disabled people living on fixed incomes who cannot afford credit card payments or mortgage payments due to state and federal law protections for their income and possessions.
Creditors and collection agencies cannot use garnishments and seizures against judgment-proof debtors as leverage during negotiations; you can leverage this fact during discussions by reminding creditors that any further attempts at collection would constitute harassment. It should be remembered, however, that being judgment proof may only be a temporary condition as soon as their financial situation changes – perhaps they resume working or receive an inheritance that makes them no longer judgment proof.
