It Just Lunch – Are Lawsuit Loans Necessary?

The term it just lunches class action lawsuit refers to a legal case where an individual who has signed up for or obtained a lawsuit loan from a lending institution, or from any of the many companies that offer lawsuit funding, has been required to attend a lunchtime class. Such cases have often been referred to colloquially as “Lunch Money”. Although such lawsuits are indeed commonplace and frequently quite useful, in reality, there is no such thing as “Lunch Money”. This misleading terminology should be corrected for anyone who is either curious about or thinking about filing a lawsuit loan against their lender.

It should be noted that while a lawsuit loan may be used in any case, it is typically the litigation funding companies that offer lawsuit funding.

Therefore, a lawsuit loan can only be used in a case in which a plaintiff has actually been able to secure a loan from a lending institution, such as a bank or a credit union. As previously noted, no one is allowed to file a lawsuit solely on the basis of being required to attend a lunchtime class. If you were to do so, you would be violating FTC regulations. Furthermore, even if you did qualify for such funding, and received a lawsuit loan, the funds would be repaid to you, at the conclusion of the case. Therefore, if you decided to pursue such a lawsuit, you would be well advised to seek advance funding from a lawsuit funding company, which would provide you with cash in hand prior to the lawsuit proceedings beginning.

It should be noted that while the terms” Lunch Money “and “Lunch Class Action Lawsuit” are commonly used interchangeably, they are distinct legal terms. A lawsuit loan is a non-recourse (receivable) loan that is given to a plaintiff to enable him or her to pursue a lawsuit. For instance, if a plaintiff had signed up for a lawsuit loan from a lending institution and was required to attend a lunch-time class, the lending company could conceivably be liable for not allowing him access to this class, because the class would fall under the heading of the bank’s “Lunch Loans” and thus, would require repayment. Conversely, if you were granted a lawsuit financing loan, you would not be responsible for repaying the monies advanced unless you were able to prove that you were either being discriminated against or subjected to other unfair practices. (see also: Fair Debt Collection Practices Act & FDCPA)

Litigation funding, on the other hand, is not a receivable loan, as it is typically a cash advance. In other words, a lawsuit funding company does not require you to sign a promissory note, or make any payments, in exchange for the monies advanced. A lawsuit loan is provided solely on the basis of an anticipated lawsuit settlement. A lawsuit financing company will advance the requested funds to you, along with a promissory note, and you then repay the advance plus any applicable interest, when the lawsuit is settled.

However, there are some significant differences between lawsuit loans and lawsuit funding.

For example, a lawsuit financing company will not advance you only if your lawsuit is successful. Also, the fees associated with lawsuit funding companies are significantly higher than those associated with lenders who advance only on the basis of success. (e.g., fees for filing fees, attorney filing fees, etc.). Also, you must repay the cash advance plus interest within the specific time frame specified by the lawsuit financing company.

So, when considering that lawsuit loan or lawsuit funding company to pursue, you will want to consider whether pursuing such funding will help you with your case and whether it is necessary to advance the monies. In addition, you will want to make sure that the funding fits within the parameters established by the legislation in your state, and you will want to make certain that the funding is provided after the fact. (e.g., if you have already obtained a lawsuit loan from a lending company, you will want to ensure that the company is paid when the lawsuit is resolved.) If you find the right litigation funding company and proceed in seeking the monies, you can obtain either a lawsuit loan or lawsuit funding company without being required to repay the monies advanced.

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