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Legal funding can be a lifeline for persons involved in personal injury lawsuits. This type of funding typically covers the plaintiff’s personal expenses while the case is ongoing, especially if they’re not working or injured. Unlike a regular loan, legal funding is completely risk-free and non-recourse, and the beneficiary does not have to pay it back if they lose the case.
However, sometimes legal funding applications can be denied. If this happens to you, it’s not the end of the road as there are several steps you can take to improve your situation. In this article, we will discuss some of the possible reasons why your legal funding application may be denied and what to do if you find yourself in that situation.
Common Reasons Why Your Lawsuit Loan Application May be Denied
Here are some common reasons why your lawsuit loan application may be denied:
Case Lacks Merit: Legal funding companies want to invest in strong cases. This means they look for cases where you have a good chance of winning. If your case doesn’t seem strong enough, they might deny your application.
Insufficient Documentation: To approve your application, the company needs lots of information about your case. This includes medical records, police reports, and other important documents. If they don’t get enough information, they might deny your application.
Legal Issues: Sometimes, legal issues can make your case complicated. If there are any legal problems, like if your lawyer missed a deadline or there’s a dispute about who is at fault, the funding company might deny your application.
Low Settlement Value: Legal funding companies want to make sure they will get their money back when you win your case. If your case is likely to settle for a small amount of money, they might think it’s not worth the risk. Remember, you won’t pay the money back if you lose. Thus, they’re the ones taking all the risk here.
Pending Liens or Other Funding: If you already have other liens (legal claims) or funding against your settlement, it might be harder for a new funding company to get their money back. This can make them deny your application.
State Laws: Some states do not permit lending companies to provide financial services to plaintiffs. If you live in one of such states, you may be unable to access pre-settlement funding
Case Recency: If your legal case is too new, lenders may be hesitant to approve your funding application. In such instances, your attorney may not have had enough time to gather enough facts about your case and provide the necessary documentation.
What To Do If Your Settlement Loan Application Is Denied
Here are a few steps you can take if your funding application is denied:
Understand Why Your Application Was Denied
The first thing you need to do is understand why your application was denied. This is important because knowing the reason can help you address any issues and possibly reapply successfully. You can ask your lawyer to help you find out why the lending firm denied the application or ask directly from the company or their representatives. Usually, most companies are upfront with the reasons behind denied applications.
Talk to Your Lawyer
Your lawyer is your best ally in the legal process. If your funding application is denied, discuss it with your lawyer. They might have insights into why it was denied and what you can do next. Furthermore, your lawyer can also help you gather stronger evidence for your case. This can make your case look better to funding companies.
Look for Other Funding Options
Sometimes, even after improving your application, you might still get denied. In this case, it’s a good idea to look for other funding options. Different companies have different criteria, so you might have better luck with another one. In some other cases, the company may deny your funding because they do not have the requisite licenses in your state. So, you’re likely to have better luck if you apply with another company.
Review Your Case’s Strength
Legal funding companies want to fund cases that have a high chance of winning or settling favorably. If your case isn’t strong enough, it might be the reason your application was denied.
Sit down with your lawyer and review all the evidence and facts of your case. Look for any weaknesses or areas that need improvement. Strengthening your case can make it more attractive to legal funding companies and help your next application.
Maintain Open Communication
When applying for legal funding, maintaining open communication with your lawyer, the funding companies, and any other involved parties is crucial. Clear and regular communication can help prevent misunderstandings and ensure that everyone is on the same page.
If you receive feedback from a funding company, share it with your lawyer so they can help you address any issues. Good communication can make the entire process smoother and increase your chances of securing funding.
Be Patient and Persistent
Applying for legal funding can be a frustrating process, especially if you face multiple denials. However, it’s important to stay patient and persistent and keep working with your lawyer to improve your case and your application.
The best approach is to take each denial as a learning opportunity and use the feedback from each denied application to strengthen your next one. Sometimes, persistence pays off, and you might eventually get the funding you need.
Consider Alternative Financial Help
If you can’t get legal funding, there are other ways to get financial help. One option is to ask family or friends for a loan. They might be willing to help you while you wait for your case to settle.
Another option is to opt for regular loans or leverage community resources. For example, you can get in touch with some charities and nonprofit organizations that offer financial help to people in need. They might just be able to help.
Conclusion
Getting your legal funding application denied can be a setback, but it’s not the end of the world. Most times, you only need to understand the reason for your denial and re-strategize on how to improve your application. With the right steps, you can find the financial support you need during your legal journey.
Contact Us for Risk-Free Lawsuit Loans!
Contact us today at High Rise Financial to apply for our affordable pre-settlement funding. Our reliable financial experts can advise you about your available options, walk you through the application process, and improve your chances of a favorable outcome. Call us at (866) 407-6404 today to start your application.