Can You Get a Lawsuit Loan if You’re in Bankruptcy?

Can You Get a Lawsuit Loan if You’re in Bankruptcy?

Can you get a Lawsuit Loan if You're in Bankruptcy?

When faced with mounting financial pressures after an injury, many people consider filing for bankruptcy. However, if you have a pending personal injury case, you may be wondering if it’s still possible to secure a lawsuit loan to help cover your expenses while awaiting a settlement.

The good news is that in most cases, being in bankruptcy does not disqualify you from obtaining legal funding. Lawsuit loan providers understand that financial hardships can strike at any time, and they are often willing to work with clients who are in the midst of bankruptcy proceedings.

These specialized lenders focus more on the merits of your legal case rather than your current credit score or financial status. As long as your lawsuit has a strong likelihood of success and a substantial potential settlement, you may still be eligible for a lawsuit loan, even during bankruptcy.

How Bankruptcy Affects Your Eligibility for Legal Funding

The latest government data revealed that total bankruptcy filings rose 16.8 percent, with significant increases in both business and non-business bankruptcies, in the twelve-month period ending Dec. 31, 2023.

According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled more than 450,000 in 2023, compared with around 380,000 cases in the previous year.

Business filings rose 40.4 percent, from nearly 14,000 to 19,000. Meanwhile, non-business bankruptcy filings rose 16 percent to around 435,000, compared with 375,000 in 2022.

It’s common for individuals facing bankruptcy to have concerns about how their financial status will affect their chances of securing a lawsuit loan.

The relationship between bankruptcy proceedings and legal financing is multifaceted, with a range of variables coming into play that can impact your eligibility.

Disclosing Your Personal Injury Case During Bankruptcy

If you are actively filing for bankruptcy, you are legally obligated to disclose any pending personal injury cases to the court. This allows the court to determine how your anticipated settlement may impact your ability to repay creditors. Failing to disclose this information could be considered bankruptcy fraud, which carries serious legal consequences.

Exempt Debts in Bankruptcy

Under United States bankruptcy laws, certain types of debts may be considered exempt when filing for bankruptcy, including:

  • Compensation from wrongful death lawsuits for someone you were financially dependent on
  • Up to $25,150 for personal injury damages (excluding exemplary losses and pain and suffering)
  • Restitution for diminished earning capacity
  • Compensation received after being victimized due to a criminal offense

How a Lawsuit Loan Can Help

Obtaining a lawsuit loan can be a valuable tool in avoiding bankruptcy altogether. By securing legal funding, you may be able to protect your anticipated personal injury settlement while covering your immediate expenses.

We recommend discussing your options with a bankruptcy attorney or the loan representatives at Tribeca Lawsuit Loans to determine the best course of action for your unique situation.

Obtaining Legal Funding After Bankruptcy Discharge

After successfully going through the bankruptcy process and obtaining a discharge, many individuals find themselves ready to move forward with their lives and put their financial troubles behind them.

However, for those still involved in ongoing legal battles, the need for additional financial support through legal funding may persist.

Impact of Discharged Bankruptcy on Lawsuit Loans

If you have previously filed for Chapter 13 or Chapter 7 bankruptcy and your debts have been discharged, this will not impact your eligibility for pre-settlement legal funding.

Once your bankruptcy petition is discharged, you are no longer obligated to pay back creditors, and the amount of your legal funding will not be limited by the compensation owed to them.

Determining the Amount of Legal Funding

In our experience, Tribeca Lawsuit Loans can typically provide around 20% of your anticipated settlement as legal funding. However, this amount may vary depending on the specific circumstances of your case. To determine your eligibility and potential funding amount, reach out to our loan specialists for a personalized assessment.

The Role of Your Attorney in Obtaining Legal Funding

Importance of Having Legal Representation

When seeking pre-settlement funding, it’s crucial to have a personal injury attorney, bankruptcy lawyer, or other legal advocate working on your case.

Tribeca Lawsuit Loans specialists will need to communicate with your lawyer to gather information about your settlement timeline and anticipated payout. This helps ensure a smooth and efficient funding process.

Eligibility Requirements for Pre-Settlement Funding

To qualify for a lawsuit loan, you must be working with a lawyer who anticipates a payout from your case. Unlike traditional loans, pre-settlement funding does not require a specific income source or credit score.

Additionally, a discharged bankruptcy should have minimal impact on your eligibility for legal funding.

Applying for a Lawsuit Loan

The application process for legal funding is designed to be straightforward, focusing primarily on the merits of your case rather than your personal credit history or financial situation.

Steps to Apply for Pre-Settlement Funding

  1. Gather supporting evidence for your application.
  2. Complete the Tribeca Lawsuit Loans application.
  3. Wait for specialists to review the application and speak with your lawyer.
  4. If approved, funds can be sent to your bank within 24 hours.

We’ve commonly seen applicants surprised by how simple and straightforward the process can be.

Consulting with Your Attorney or Tribeca Lawsuit Loans

A question we come across frequently is whether a lawsuit loan is a better option than filing for bankruptcy. The answer depends on your individual circumstances, which is why we recommend discussing your options with both your attorney and our loan specialists. They can help you weigh the pros and cons and make an informed decision.

Using Your Pre-Settlement Funds

Once you’ve successfully obtained a lawsuit loan, the question arises: how can you best utilize these funds to support yourself and your legal journey?

The use of pre-settlement funds is a personal decision and entirely depends on your unique circumstances.

No Restrictions on Spending

Once you receive your lawsuit loan, the money is yours to spend as needed. This gives you the freedom to allocate the money where it’s needed most.

Examples of Expenses Covered by Lawsuit Loans

Lawsuit loans can be used to cover a wide range of expenses, including:

  • Rent and mortgage payments
  • Car-related expenses (rental, insurance, car notes)
  • Credit card debt
  • Groceries and household items
  • Entertainment expenses

For example, let’s say you were injured in a car accident caused by a negligent driver. While your personal injury case is pending, you may be unable to work and struggling to keep up with your bills.

By securing a lawsuit loan, you can use the funds to pay your rent, cover your car expenses, and purchase necessities like food and medication. This can provide much-needed financial relief while you await your settlement.

Key Takeaways and Next Steps

It’s important to remember that being in bankruptcy does not automatically disqualify you from obtaining pre-settlement funding. We encourage you to consult with your attorney and our loan specialists to explore your options and determine if a lawsuit loan is right for you.

To get started, simply fill out our quick contact form or call us at 866-388-2288. Our team is here to help you navigate this challenging time and secure the financial support you need.

Frequently Asked Questions (FAQs)

Can I get a lawsuit loan if I’m currently in the process of filing for bankruptcy?

Yes, in most cases, you can still obtain a lawsuit loan while in the process of filing for bankruptcy. However, you must disclose your pending personal injury case to the court, as it may impact your ability to repay creditors.

Will a previous bankruptcy affect my ability to get legal funding?

If you have previously filed for Chapter 13 or Chapter 7 bankruptcy and your debts have been discharged, this will not impact your eligibility for pre-settlement legal funding.

How much of my anticipated settlement can I receive as a lawsuit loan?

Typically, Tribeca Lawsuit Loans can provide around 20% of your anticipated settlement as legal funding. However, this amount may vary depending on the specific circumstances of your case.

Are there any restrictions on how I can spend my pre-settlement funds?

No, once you receive your lawsuit loan, the money is yours to spend as needed. Tribeca Lawsuit Loans does not impose any limitations or monitoring on how you use your pre-settlement funds.

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