Many lawsuit plaintiffs have financial troubles while they wait for a settlement-trouble that could lower their credit rating. Credit reports are compiled by companies called credit bureaus that receive reports directly from lenders about their customers’ payment practices. Based on a debtor’s history of paying bills and the amount of debt the person carries, credit bureaus come up with a credit score for each person. Every time a person applies for credit-including applying to rent an apartment-if the applicant receives credit and what the applicant pays for credit is largely determined by his or her credit score. Every lawsuit plaintiff needs to know about credit scores, because any lowering of his or her credit score will affect his ability to get a car loan or a credit card, or rent an apartment, once his lawsuit is resolved and he is ready to resume his old lifestyle. Fortunately, lawsuit funding can help many plaintiffs maintain a good credit rating and, therefore, face a brighter financial future once their cases are settled.
Lawsuit funding can help a plaintiff pay critical bills and loan payments while he or she waits the months-or even years-it can take for a lawsuit to be resolved. Lawsuit funding can provide cash so lawsuit plaintiffs can at least make the minimum payment on credit card accounts. Once the plaintiff receives his or her settlement, he can use that lump sum to completely pay off his debts or substantially pay down his debt. summons and complaint
By helping a plaintiff avoid late fees, disruption of his or her credit, and-worst of all-default, foreclosure, bankruptcy or repossession, lawsuit funding can help a lawsuit plaintiff come through a lawsuit with a respectable credit rating. Once a person’s credit is damaged, it can take years for that person to restore his or her credit. A debtor who has declared bankruptcy is often unable to get any financing at all for years. Foreclosure and repossession are also serious negatives on a credit report. Using lawsuit loans to stay current on bills and debts can produce benefits for that plaintiff for years. Bad credit can cause years of misery.
Litigation funding transactions do not appear on a credit report, so a lawsuit advance does affect a person’s debt-to-income ratio. Too much debt on a credit report lowers a credit score. A LawMax lawsuit funding advance is a lien against the plaintiff’s lawsuit, not a lean against the plaintiff’s personal assets or income stream, and that is why a lawsuit funding transaction does not appear on a credit report so it cannot have any effect on the recipient’s credit score. Additionally, since lawsuit funding advances are not personal loans, if a plaintiff needs a financial statement to apply for a mortgage or other type of financing, the lawsuit funding advance does not have to be included as a liability because a LawMax advance is a lien against the lawsuit, not the plaintiff.
By keeping a good credit record, it is easier for plaintiffs to recover financially after a lawsuit. Good credit is literally something that money cannot buy. It can take months or years to recover from a period of bad credit, so plaintiffs should do everything they reasonably can in order to maintain the best possible credit. In the days, months, and years after a lawsuit is concluded, plaintiffs may need financing for a new car or a new home. Good credit is a key ingredient in getting back to a normal lifestyle once a lawsuit plaintiff has received his or her settlement.