When taking out a loan, or receiving any funding that will result in debt, it is crucial to know whether you’re getting a recourse loan or a non-recourse loan. Those are the two categories of debt into which the Internal Revenue Service divides all loans. Though the names sound similar, the difference is that non-recourse loans put restrictions on how the lender can pursue repayment. In this way, they protect the borrower from predatory lending.
High Rise Financial provides non-recourse pre-settlement legal funding to personal injury claimants with a pending lawsuit. Since these funds are classified as non-recourse, there is no risk to the borrower. If you lose your case, you don’t owe us anything! In this post, we’ll discuss the main difference between non-recourse and recourse loans, as well as how the pre-settlement legal funding process works.
If you have a lawsuit in the works, and need extra money to deal with your current financial stressors, fill out the form on our Apply Now page or call our office at (877) 823-4377.
If your loan is classified as a recourse, the lender has much more leeway for pursuing repayment. That is because you are held personally liable for the entirety of the debt associated with the loan. If your loan is secured by collateral, the lender can take the collateral and continue to pursue payment from you if the collateral does not cover the full debt you owe. Here’s a simple example using a recourse home loan.
- You take out a recourse home loan from your bank.
- The house is used as collateral for this loan, which is typical for home loans.
- Eventually, you end up defaulting on the loan.
- The bank repossesses your house, but your home’s value does not cover the full amount you owe.
- The bank can take money out of your paycheck or continue to hound you for payment until it is entirely repaid.
Recourse loans represent the worst form of borrowing from a borrower’s perspective since they do not protect borrowers. Many lawsuit lenders use these kinds of predatory loans, coupled with high compound interest rates, to trap borrowers into paying two to three times what they owe, even if they lose their lawsuit. That’s why the Center for Public Integrity warns borrowers about lawsuit loans.
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On the other hand, non-recourse loans protect the borrower by restricting how the lender can pursue repayment. With this kind of debt, the borrower is NOT held personally liable. This means that the most the lender can take is the collateral associated with the loan, even if the collateral does not cover what is owed.
Using the above example of a home loan, if you defaulted on your loan, the most the bank could do is take your house. While that is a big deal and is unfortunate, the bank would be unable to garnish your wages or hound you for more payment, even if your home’s value did not match what you still owed on the loan. In this way, the negative impact of defaulting is limited.
High Rise Financial’s Legal Funding
We provide exclusively non-recourse funding to clients in need, but we don’t do loans per se. Instead, our financial assistance is classified as pre-settlement legal funding. The essential factors to remember are:
- You don’t owe us a dime if you lose your lawsuit.
- You repay the funds directly from your settlement or jury award, meaning there are no monthly payments.
- There is no risk to you.
- The application process is FREE!
Qualifying for Non-Recourse Pre-Settlement Legal Funding
High Rise Financial protects the borrower with our non-recourse legal funding, but we also need to protect our underwriters. That’s why we have some criteria for qualification. If you consider applying for pre-settlement legal funding, make sure you check off the following items in our list of qualifications.
You Have a Personal Injury Case
First, you need to have a valid personal injury claim on file. If you haven’t yet filed your claim in court, you won’t be eligible for pre-settlement legal funding. Cases we’ve helped fund in the past include:
- Car accidents
- Bike and pedestrian collisions
- Medical device injuries
- Product liability
- Nursing home negligence
- Medical malpractice
You Are Represented By an Attorney
We also require our clients to be represented by a lawyer or law firm. This helps ensure that your case has a high chance of resolving favorably. Plus, claimants with attorneys on their side usually end up with much larger compensation packages, even after attorneys’ fees are taken out. It’s a win-win!
Get Your Non-Recourse Legal Funding Today
High Rise Financial’s process is quick and straightforward. After you apply, our underwriters examine the validity of your claim, the extent of your damages, and the total compensation you expect to receive. Depending on the factors in your case, you can have up to $250,000 in your bank account within 24 hours.
To get started, simply fill out the form on our Apply Now page. If you’d like to speak with a member of our team about the details of the process, just call us today at (877) 823-4377.