Unlike a conventional loan, which must be repaid regardless of the loan recipient's ability to repay it, a lawsuit loan (or more correctly, a lawsuit advance) is a non-recourse form of financing. This means that you only have to repay the advance if and when you actually receive money from your lawsuit settlement. When you are involved in a lawsuit, there are four possible outcomes: You may win your case, you may reach an out of court settlement, you may lose the case, or you and your attorney might decide to abandon the case. What happens regarding repayment of your lawsuit advance depends on how your case is resolved.

If you win your case or you reach an out-of-court settlement, your attorney will pay off your lawsuit advance when he or she disburses the funds from the resolution of a case. As part of the final settlement of the case, your attorney will make payments to all parties who have a claim against your settlement–including attorney loan–from the proceeds of the settlement, then send you what funds remain.

If you lose the case at trial, your case is dismissed by the court, or you and your attorney decide to abandon your claim, you keep the advance, and LawMax absorbs the loss.

While the cost of a lawsuit advances (what's called the “risk premium”) is often higher than interest on a traditional loan, it is important to keep in mind that a conventional loan has to be repaid–no matter what happens with your case. If you take out traditional financing, expecting to use the proceeds of the settlement to repay the loan, you are accepting all of the risk. If you drop or lose the case, you will still need to repay the loan in full. This can create real financial hardship and damage your credit rating if you are unable to make the loan payments. With a lawsuit advance, however, you only need to repay the advance if and when you win your case or settle out of court. LawMax accepts all the risk, so that you not have to pay if you do not receive proceeds from the settlement. Whether you have to repay or not, though, you can still have the lawsuit advance to pay living expenses and replace lost income.

Another factor to consider when trying to decide between a lawsuit loan and conventional financing is the method of repayment. With a conventional loan, you will have to begin repaying your loan immediately, even though your case may not be settled for months or years. With a LawMax lawsuit advance, all repayment is deferred until you win your case or settle out of court. There are no application fees or up-front costs, and there are no monthly payments. When your case settles, your attorney will send a check to LawMax on your behalf repaying the advance from the proceeds of your settlement or award.

Making the right financing decision for your case may affect you for years to come, so do consider all your options carefully, and do not hesitate to contact LawMax to discuss your options.