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When facing financial hardship after an accident or personal injury and while your case is ongoing, applying for a lawsuit loan may be ideal for you. Legal funding can help you pay medical costs, bills, cover living expenses, and avoid pressure to settle early. However, before you accept any money, it is important to understand what you are agreeing to.
Disclosures are the key to making a smart decision. They help you see the full picture, including how much you are getting, how much you will repay, and what happens if your case does not settle. A good lawsuit funding company will be honest, clear, and willing to answer your questions. Here, we will explain why disclosures matter and what you should expect to see in a legal funding agreement.
What is a Disclosure?
A disclosure can be described as information that a company is required to share with you before you sign an agreement. In simple terms, it means telling you the full truth upfront, with no surprises and no hidden details. For example, in lawsuit funding, a disclosure might explain:
- How much money you’ll get.
- What fees or interest you’ll pay.
- What happens if you lose your case.
- That you don’t owe anything if there’s no compensation.
Disclosures help you understand exactly what you’re signing so you can make a smart, informed decision.
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Why Do Disclosures Matter in Lawsuit Funding?
Furthermore, disclosures are very important in pre-settlement funding because they protect you. They make sure you know exactly what you are signing and what it means for your future settlement. Without proper disclosures, you could end up with hidden fees, unclear repayment terms, or unexpected costs that reduce your recovery. Here are a few reasons why disclosures are so important:
- They help you compare offers from different legal funding providers.
- They show you how interest and fees are calculated.
- They confirm that you will not owe anything if you lose your case.
- They involve your attorney in the process.
- They give you the right to cancel if you change your mind.
- They explain how disputes will be handled if something goes wrong.
When you understand the terms, you can make a confident decision. You will know how the funding works, how it affects your case, and how to protect your settlement.
What Disclosures Should a Lawsuit Funding Company Provide Its Clients?
Before you sign a legal funding agreement, make sure the company provides clear and complete disclosures. These should be written in plain language and be easy to understand. Your attorney should also review the contract and confirm that it will not interfere with your case. Here are some key disclosures every funding company should provide:
1. Total Funding Amount and Repayment Terms
The agreement should clearly state how much money you will receive. It should also explain how and when repayment happens. Legal funding is often repaid from your settlement, and not from your personal income. There are no monthly payments, and you do not owe anything until your case resolves.
Likewise, the contract should show how the repayment amount is calculated. This includes the original funding amount plus any fees or interest. You should be able to see a sample repayment schedule based on different settlement outcomes.
2. Interest Rates and Fee Structure
In addition, the company must disclose the interest rate and how it is applied. Is it simple interest or compounding interest? How often does it accrue? These details affect how much you will owe over time. You should also see a full list of fees. This may include origination fees, processing fees, administrative charges, or other costs. The agreement should show the total cost of the funding over time, so you can understand the full impact on your settlement.
3. Non-Recourse Agreement Terms
Legal funding is non-recourse. That means you only repay the money if your case settles or you win in court. If your case is dismissed or you do not receive a settlement, you owe nothing. The contract should clearly state this. It should confirm that you are not personally liable and that the funder cannot pursue you for repayment. This protects you from possible financial risk and gives you peace of mind.
4. Cancellation and Cooling-Off Period
What’s more, you should have the right to cancel the agreement within a certain time frame. This is often called a cooling-off period. It gives you time to review the terms, talk to your attorney, and change your mind if needed. The contract should explain how to cancel, how long you have, and whether any fees apply. A good lawsuit funding company will make this process easy and respectful.
5. Attorney Involvement and Acknowledgment
Also, your attorney must be involved in the funding process. They will review the agreement, confirm that it does not interfere with your case, and help manage repayment when the case settles. The contract should include a section for your attorney to sign. This shows that they understand the terms and agree to work with the legal funding provider. It also helps protect your legal strategy and ensures that everyone is on the same page.
6. Dispute Resolution and Governing Law
The agreement should explain how disputes will be handled. If something goes wrong or you have a complaint, you need to know where to turn. The contract may include an arbitration clause or specify that disputes will be resolved in court. It should also state which state’s laws apply to the agreement. This helps you understand your rights and what legal protections are in place. The company should provide contact information for questions or concerns.
Read Every Disclosure Before You Sign
Legal funding can be a helpful tool when facing financial distress with your case pending, but only if you understand the terms. Before you accept any pre-settlement loan, take time to read the disclosures. Talk to your attorney and ask questions. Make sure the agreement is clear, fair, and in your best interest.
Above all, a reputable lawsuit funding company, like High Rise Financial, will be open and honest. They will explain everything in plain language and give you time to decide. If something feels unclear or rushed, that is a red flag. You deserve transparency and respect.
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Need Risk-Free Lawsuit Loans? Call High Rise Financial Today to Apply!
At High Rise Financial, we offer affordable, risk-free lawsuit loans to injury victims and claimants with ongoing civil and personal injury lawsuits. Our pre-settlement funding agreements are clear, and our terms are fair. Also, our team will work directly with your attorney and guide you through the process. Call us today at (866) 407-6404 to apply. We will enlighten you about your available lawsuit funding options and help you navigate key decisions.
Call or text (877) 735-0016 or fill out our form to apply today for free.