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Lawsuit settlements are generally much easier to collect than collecting judgments.
But easy doesn't mean fast. Attorneys and their clients
can wait weeks, if not months, for the proceeds of a settlement.
To expedite this process, companies in the settlement purchase business
offer a quick alternative to getting your hands on your money, minus
a 5 percent to 8 percent fee.
Settlements are different from judgments: Under a settlement, both parties to a dispute or lawsuit have agreed on terms. Under a judgment, a decision is imposed on both parties by a judge. Since the party to the settlement that owes the money has agreed to pay that money, there is usually no difficulty about getting it, but paperwork hassles can delay the receipt of the amount of the settlement.
"Once a case settles, we can provide those settlement funds either to the attorney involved or the attorney and client within an hour," says Peter Speziale, CEO of RapidFunds, a settlement purchase company. "We deal with all sizes of settlements from $5,000 to those in the six figures."
The company's fee depends on the underlying obligator
-- the entity that is obligated to pay under the terms of the settlement
-- and the creditworthiness of the party or parties receiving the
money. Once an application is filled out, it is vetted by underwriters.
Once approved, the money is made available.
"It really helps the cash flow for the client
and the attorney," he says. "The client may need the funds
to pay bills and can have the money in hand almost immediately instead
of waiting."
Collecting a judgment can be more difficult, but we'll
tell you how. For more information, see "How
to collect court judgments."
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