Warning Against Legal Funding and Loans | The Law Offices of Joumana Kayrouz, PLLC
phone: (248) 557-3645 fax: (248) 200-0645 email: firstname.lastname@example.org 1000 Town Center, Suite 800 Southfield, MI 48075
In today’s day and age, many companies are advertising their legal funding/loan services. This is where they provide an advance or loan to a Plaintiff/claimant in an injury lawsuit/claim. These loans may seem attractive since you can get money in your hands way in advance of the conclusion of your claim or lawsuit. However, these loans come with a lot of baggage. First, you have to usually pay an initiation fee. Second, the interest rates can be astronomical. Lastly, there are so many unknowns as to the result and length of a case.
The initiation fees mean you will lose money no matter what. Just off the top, you are required to pay back a fee for even taking the loan. This is regardless of how long you are loaned the money.
Interest rates are only getting worse and worse. Many loans will require you to pay double or triple what you borrowed. Some interest rates can get even worse than that and you will have to pay four to five times more.
The result and length of your case is also very unknown as well. Cases can get dismissed, missed facts can decrease the value of your case, and most importantly, a case can take several months. Thus, if your case takes long your owed interest will continue to increase.
All in all, desperate times sometimes call for desperate measures. Nonetheless, we strongly urge you to avoid taking these legal funding loans at all costs. The return on them is terrible and will lead you to lose money before you even obtain it.