Can I Use a Lawsuit Loan for Child Support Payments?

Explore how lawsuit loans can help you manage child support during legal challenges. Quick, supportive funding solutions tailored for your needs.

Are you facing financial challenges while juggling legal proceedings and family responsibilities? Past-due child support, a financial contribution mandated by the court for the care and upbringing of a child, can add to these pressures, especially during a prolonged legal process.

If you’re struggling to meet such obligations, you might be searching for an immediate financial solution. One viable solution could be a lawsuit loan—a unique financial tool designed to alleviate monetary stress during litigation, particularly when you are trying to take care of your children.

Let’s delve into how a lawsuit advance loan can be the financial lifeline you and your family need.

A Quick Understanding of Lawsuit Loans

A lawsuit loan, commonly referred to as pre-settlement lawsuit funding, is a non-recourse loan for plaintiffs, which means you are only obligated to repay the loan if you win your legal case. This type of funding provides a safety net, so that you aren’t burdened by additional debt if your lawsuit doesn’t conclude in your favor.

Moreover, the application for a lawsuit loan doesn’t involve credit checks. Instead, your eligibility is based solely on the merits and potential outcome of your civil case. This makes lawsuit funding an accessible financial option when you’re overwhelmed by immediate expenses such as child support debt. It offers crucial assistance with financial difficulties without the stress of traditional loan requirements.

Assessing Child Support Liens in Legal Funding

To qualify for a lawsuit loan, you must have a strong case and must be represented by an attorney. Legal funding companies work directly with your lawyer to evaluate your case and manage the loan.

However, when there are existing child support arrears, funding companies need to account for any existing liens when assessing a case for funding. Since child support is a priority lien on any legal settlement, it lowers the available settlement amount from which a loan might be repaid.

At Baker Street Funding, when a potential client has outstanding child support obligations, these are what we take into consideration during the case evaluation. Here’s how it generally works:

1. Case Review. During the initial case evaluation, our team reviews all aspects of the case, including any child support liens. We assess the total expected settlement amount, and subtract mandatory obligations like child support.
2. Adjusting Funding Amount. Based on the remaining potential settlement after accounting for child support, we determine the funding amount. We take this measure to provide a loan amount that’s sustainable for you and minimizes risk for both you and our company. By reducing the funding amount to accommodate child support obligations, we also help maintain the financial integrity of your settlement.
3. Legal and Ethical Compliance. This approach not only complies with legal requirements but also upholds our ethical standards. It lets you meet your urgent financial needs—such as living expenses or medical bills—without jeopardizing your obligations to dependents.
4. Transparent Communication. Baker Street Funding makes sure to discuss these details transparently with you and your attorney, so that both understand how child support can affect your funding options and overall financial planning during the lawsuit process.

Application Process

The pre-settlement funding application process is fairly simple: it begins with an initial inquiry—usually through an online form or a quick phone call—followed by the submission of relevant case documents by your attorney.

Once your case is reviewed and approved, funds can typically be disbursed swiftly, often within hours directly into your bank account. You can also choose to receive a check.

9 Consequences of Not Paying Child Support

Failing to pay child support can have serious legal and financial consequences beyond just a lien on a settlement. Here are some potential repercussions:

1. Driver’s License Suspension. Failure to pay child support can result in the suspension of your driver’s license. This can significantly impact your daily life, making it difficult to commute to work, run errands, or fulfill other priorities.
2. Professional License Revocation. Many states have laws that allow for the revocation or suspension of professional licenses for those who are delinquent in child support payments. This can jeopardize your ability to work in certain professions, such as healthcare, law, or trades requiring certification.
3. Denial of Passport. If you owe a large amount, you may be denied a passport or have your current passport revoked. This can limit your ability to travel internationally for personal or professional reasons.
4. Seizure of Tax Refunds. Undue child support can lead to the interception of your federal and state tax refunds. This means that any refund you’re owed will be applied to your child support arrears.
5. Negative Impact on Credit Score. Child support agencies can report delinquent payments to credit bureaus, leading to a negative impact on your credit score. This can make it more difficult to obtain loans, credit cards, or even rent an apartment.
6. Wage Garnishment. Courts can order a wage garnishment to collect unpaid child support. This means a portion of your paycheck will be automatically deducted to cover your child support obligations, leaving you with less disposable income.
7. Property Liens. Unpaid child support can result in liens being placed on your property, such as your home or car. This can complicate the sale or refinancing of the property and might even lead to foreclosure in extreme cases.
8. Contempt of Court. Not paying child support is considered contempt of court. This can lead to fines and, in some cases, jail time. Being held in contempt can also compromise your legal standing in your personal injury lawsuit.
9. Impact on Employment Opportunities. Some employers conduct background checks that include a review of child support obligations. Delinquent child support payments can negatively affect your employment opportunities, particularly in jobs that require financial responsibility or security clearances.

Benefits of Using Pre-Settlement Funding for Court-Ordered Child Support

 If you find yourself unable to manage child support payments due to financial constraints from ongoing legal proceedings, you can use pre-settlement funding to pay your dues. Not only does funding help avoid the severe consequences mentioned above, but it also helps in many other ways, such as:

1. Flexible Use of Funds. Pre-settlement legal funding is not restricted in how it can be used. After taking care of child support liens, you can use the remaining funds for other urgent needs like medical bills, living expenses, or even additional legal costs, giving you comprehensive financial relief.
2. Enhances Legal Standing. Settling child support liens with a personal injury lawsuit advance can improve your standing in court. It demonstrates to the judge that you are taking responsibility for your obligations, which can positively influence your personal injury lawsuit.
3. Facilitates Better Legal Negotiations. Having the financial burden of child support liens lifted can allow you to better focus on your legal case. This can lead to a more favorable settlement since you won’t be pressured to accept a lower offer due to these urgent family obligations.
4. Eases Better Co-Parenting. You can improve your relationship with your co-parent and even the child support agency. This can lead to better communication and cooperation, ultimately benefiting your child’s mental state by creating a more stable and supportive environment.
5. Preserving Parental Rights. Consistent child support payments can positively influence custody arrangements and visitation rights. It shows the court your commitment to fulfilling your financial responsibilities and providing for your children. It leads to fewer enforcement actions and a smoother experience in future interactions.
6. Stability for the Child. By addressing child support liens quickly with pre-settlement funds, you’re providing stability for your child’s needs, such as education, healthcare, and daily expenses, This, in turn, supports your child’s overall well-being and development.
7. Reinstatement of Hunting and Fishing Licenses. In some states, unpaid child support can lead to the suspension of recreational licenses, like hunting and fishing. Clearing your child support liens can restore these privileges, allowing you to enjoy these activities again once you recover from your injury.
8. Eligibility for Military Service. Unpaid child support can be a barrier to enlisting or continuing service in the military. Settling these liens lets you remain eligible for service, allowing you to pursue or continue a career in the armed forces.

Increased Funding Opportunities After Paying Off Child Support Liens

Once you’ve fulfilled your child support obligations, your financial profile improves, potentially increasing your eligibility for additional lawsuit funding. Here’s how we at Baker Street Funding approach such situations:

1. Updated Financial Assessment. When you, having previously paid off your child support, seek more funding, we conduct a fresh evaluation of your current liens. With the child support lien settled, typically more of your potential settlement becomes available as security for the loan.
2. Higher Funding Potential. With your previous child support obligation cleared, we often can offer a larger amount of funding. This is because the risk associated with repayment is reduced, allowing for greater flexibility in the funding amount.
3. Streamlined Processing. For returning clients like you who have demonstrated responsibility by clearing child support, the application process can be more streamlined. Your history with our company can facilitate quicker assessments and quicker disbursement of funds.

Why Baker Street Legal Funding?

Choosing Baker Street Funding for your lawsuit loan comes with several advantages. Known for competitive rates and a quick approval process, Baker Street Funding puts client needs at the forefront. Our approach is transparent and supportive, so that you fully understand the terms of your loan and feel supported throughout the process. With Baker Street Funding, you receive not only financial relief but also a partnership that respects and upholds your best interests.

If you are considering a lawsuit loan to manage child support payments or other financial obligations during a lawsuit, Baker Street Funding invites you to reach out to us to discuss your case details and explore how we can help provide the financial support you need.

Don’t let financial stress distract you from what matters most—let us help you secure the funding you need to regain control of your financial stability for you and your children.

FAQ

Can I use a lawsuit loan to pay child support if I am currently involved in ongoing legal proceedings?

Yes, you can use a lawsuit loan to pay child support even if you are facing financial constraints due to ongoing legal proceedings. Lawsuit loans are designed to provide financial assistance during the litigation process, allowing you to meet your obligations, including child support payments.

 Will paying off my child support increase my eligibility for additional lawsuit funding?

Settling your child support arrearage debt could potentially make you eligible for additional lawsuit funding in the future because a larger portion of your potential settlement becomes accessible as collateral for the loan.

Can child support be collected through wage garnishment?

Yes, child support owed can indeed be collected through wage garnishment. This means that if child support payments are overdue, the court can order an employer to withhold a certain portion of the individual’s paycheck. This deducted amount is then directly sent to the child support enforcement agency or the other parent, so that that child support obligations are met even if the paying parent is behind on payments.