By Frank Berg, Esq. – Legal Berg, LLC
When you’re injured in an accident and pursuing a personal injury claim in New Jersey, financial pressures can mount quickly. Medical bills pile up, you may be unable to work, and everyday expenses continue while your case works its way through the legal system. This is where lawsuit funding—also called litigation financing or legal funding—can provide crucial financial relief.
As a New Jersey personal injury attorney with extensive experience helping accident victims, I’ve seen how financial stress can impact both clients and their families. After serving as a probation officer and working with families in crisis, I understand that injuries affect entire households, not just the person who was hurt. That’s why I want to help you understand this important financial tool.
What Is Lawsuit Funding?
Lawsuit funding is a financial service where a company provides cash advances to plaintiffs who have pending personal injury cases. Unlike traditional loans, these advances are “non-recourse,” meaning you only repay the funding if you win or settle your case. If you lose your case, you typically owe nothing back.
Key Features of Lawsuit Funding:
- No monthly payments during your case
- No credit checks required
- No employment verification needed
- Repayment only if you win your case
- Funds can be used for any purpose (medical bills, rent, groceries, etc.)
How Lawsuit Funding Works in New Jersey
The process is typically straightforward:
- Application: You or your attorney submits an application to a funding company
- Case Review: The company evaluates the strength and value of your case
- Attorney Cooperation: Your lawyer provides case details and cooperates with the funding company’s review
- Approval Decision: The company decides whether to fund your case and for how much
- Fund Transfer: If approved, funds are typically transferred within 24-48 hours
- Repayment: You repay the advance plus fees only if your case is successful
What to Look for in a Lawsuit Funding Company
Based on my experience representing New Jersey personal injury clients, here are the most important factors to consider:
1. Transparent Fee Structure
- Clear disclosure of all fees and interest rates
- Simple terms you can understand
- No hidden charges or surprise fees
- Competitive rates within industry standards
2. Reasonable Funding Terms
- Appropriate advance amounts (typically 10-20% of expected settlement)
- Flexible repayment options
- Fair compound interest policies
- No prepayment penalties
3. Professional Operations
- Quick application processing (24-48 hours)
- Responsive customer service
- Professional communication
- Established track record in the industry
4. Attorney-Friendly Policies
- Cooperative with legal counsel
- Respectful of attorney-client relationship
- Clear communication protocols
- Reasonable documentation requirements
Red Flags to Avoid
Through my years of practice, I’ve identified several warning signs of problematic funding companies:
Financial Red Flags:
- Excessive interest rates (over 40% annually)
- Hidden fees or charges
- Confusing contract terms
- Pressure to accept quickly without review
Operational Red Flags:
- Poor customer service or communication
- Unwillingness to work with your attorney
- Requests for inappropriate personal information
- No physical address or legitimate business credentials
Important Considerations for New Jersey Clients
Legal Implications
- Attorney involvement is crucial – Always discuss funding options with your lawyer first
- Contract review – Have your attorney review any funding agreement before signing
- Case impact – Understand how funding might affect your case strategy or timeline
Financial Planning
- Calculate total costs – Understand exactly what you’ll owe if you win
- Consider alternatives – Explore other options like personal loans or family assistance
- Budget carefully – Use funding for essential expenses, not luxury items
Family Considerations
Having worked extensively with families in crisis, I know that financial stress affects everyone in the household. Lawsuit funding can provide breathing room, but it’s important to:
- Discuss the decision with family members
- Use funds responsibly for necessary expenses
- Maintain realistic expectations about case timelines
- Continue following your attorney’s guidance throughout the process
Questions to Ask Potential Funding Companies
Before choosing a lawsuit funding company, ask these essential questions:
- What is your total fee structure?
- How do you calculate interest and compound periods?
- What happens if my case takes longer than expected?
- Do you charge any application or processing fees?
- How quickly can you process my application?
- Will you work directly with my attorney?
- What documentation do you need from my case?
- Are there any prepayment penalties?
- What is your policy if I want to pay back early?
- Can you provide references from other attorneys?
Working with Your Attorney
As your legal representative, I strongly recommend involving your attorney in any lawsuit funding decision. Here’s why:
Attorney Benefits:
- Case evaluation expertise – We can help assess whether funding makes sense for your specific situation
- Contract review – We can identify problematic terms or unfair conditions
- Negotiation assistance – We may be able to help secure better terms
- Strategic planning – We can ensure funding doesn’t negatively impact your case
Client Protection:
- Avoid predatory companies – We can help identify reputable funding sources
- Understand true costs – We can help calculate the real expense of funding
- Maintain case focus – We’ll ensure funding doesn’t distract from your legal goals
Alternatives to Consider
Before pursuing lawsuit funding, consider these alternatives:
Traditional Financial Options:
- Personal loans from banks or credit unions
- Credit card advances (compare interest rates)
- Borrowing from family or friends
- Employer advances or extended leave policies
Legal Alternatives:
- Expedited case resolution through negotiation
- Partial settlements for immediate needs
- Medical payment coverage from insurance policies
- Workers’ compensation benefits if applicable
My Professional Perspective
After years of representing New Jersey personal injury clients and my background working with families in crisis as a probation officer, I’ve seen how financial pressure can affect both case outcomes and family wellbeing. Lawsuit funding can be a valuable tool when used appropriately, but it’s not right for every situation.
When Funding Makes Sense:
- You have a strong case with clear liability
- You’re facing immediate financial hardship
- Traditional financing isn’t available
- You understand the costs involved
- Your attorney supports the decision
When to Proceed Carefully:
- Your case has uncertain liability or damages
- You have access to other financial resources
- The funding costs seem excessive
- You’re considering it for non-essential expenses
The Importance of Personal Attention
At Legal Berg, LLC, I personally get to know each client and their family to understand how their accident has impacted their lives. This personal approach helps me provide better guidance about financial decisions like lawsuit funding. Unlike larger firms where you might be just a case number, I take time to understand your unique situation and provide personalized advice.
Having been interviewed by News 12 New Jersey and My9 News about personal injury law matters, I’m often asked about financial challenges facing injury victims. The stress of mounting bills while waiting for case resolution is real, and lawsuit funding can provide important relief when used wisely.
Making an Informed Decision
Lawsuit funding has become an accepted and valuable tool for many personal injury clients in New Jersey. However, like any financial decision, it requires careful consideration and professional guidance.
Before Moving Forward:
- Discuss with your attorney – Get professional legal advice about your specific situation
- Research multiple companies – Compare terms, rates, and reputation
- Read all documents carefully – Understand exactly what you’re agreeing to
- Consider long-term impact – Think about how funding affects your overall financial picture
- Use funds responsibly – Prioritize essential expenses and family needs
Contact Legal Berg, LLC for Guidance
If you’re considering lawsuit funding for your New Jersey personal injury case, I encourage you to discuss this decision with me first. As your attorney, I can help you evaluate whether funding makes sense for your situation, review any proposed agreements, and ensure you’re working with reputable companies.
My diverse background—including my experience as a probation officer working with families in crisis and my current role representing children in DYFS litigation—gives me unique insight into how financial stress affects families. I’m committed to helping you make decisions that serve your family’s best interests throughout your case.
Contact Information:
- Free Consultation Available
- Personal Attention from Frank Berg, Esq.
- Serving All of New Jersey
- No Fee Unless You Win
Remember, at Legal Berg, LLC, we believe in “Personal Injury Law with a Personal Touch.” That means taking time to understand your unique situation and providing guidance that considers your entire family’s wellbeing.
This article is for informational purposes only and does not constitute legal advice. Every personal injury case is unique, and decisions about lawsuit funding should be made in consultation with your attorney. Past results do not guarantee future outcomes.
About Frank Berg, Esq.: Frank Berg is a New Jersey personal injury attorney with extensive experience in motor vehicle accidents, dog bite cases, and workplace injuries. He holds a J.D. from Quinnipiac University and has been admitted to practice in New Jersey since 1998. Frank is a former Board of Governors member of the New Jersey Association for Justice and has been interviewed by television and newspapers as an expert on New Jersey personal injury law.