You’ve probably heard advertisements from lawsuit lending companies, promising “quick cash” and “no risk” loans. But the reality is that these companies are far from straightforward about the terms and costs of their loans.
For those of you unacquainted, here’s how lawsuit loans work: a plaintiff in a personal injury case, who is hoping for a favorable settlement, takes a lawsuit loan to cover immediate expenses such as car repairs and medical bills. But when the plaintiff finally wins his case and has to pay back the loan, he finds an unpleasant surprise: the company has charged him fees comparable to well over 100 percent in interest per year. The plaintiff now owes much more than he borrowed, and possibly even more than his court award or settlement!