9 financing options to pay for legal fees | finder.com
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Compare financing options to pay for legal fees

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Find the best financing to cover the costs of your legal case.

Emotions can run high when you’re dealing with a lawsuit — and the high cost of legal fees don’t help. Legal representation doesn’t come cheap and a drawn out lawsuit can run anyone’s finances into the ground if they pay out of pocket.

To avoid going broke, you might want to consider getting help paying your fees. Read on to learn about your options.

Credible Personal Loans

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    What are my borrowing options to pay for legal fees?

    The most straight-forward way to pay legal fees is out of pocket. But that’s not always a possibility, especially if you weren’t expecting to need a lawyer. In those situations, you might want to consider one of the following options.

    Personal loan

    Best for: A one-time legal expense

    You can generally use a personal loan for any legitimate expense, including legal fees. They’re best for when you know ahead of time how much you need to spend — like paying for a consultation or a cut-and-dry case.

    You can typically borrow between $2,000 and $100,000 at once and pay it back in monthly installments over a fixed period of time, usually between one and 10 years.
    Find and compare personal loans

    Personal line of credit

    Best for: A drawn-out legal proceeding

    When you’re not sure how long you’re going to need to pay legal fees, you might want to look into personal lines of credit. Instead of borrowing a set amount of funds once, you’re have access to a certain amount of funds at any time. You only have to pay interest or fees on the amount you draw and can typically renew your credit line as many times as you want.
    Compare lenders offering personal lines of credit

    Contingency fee

    Best for: Someone suing for damages

    Hoping to win a settlement? You might want to ask your lawyer if they’d be willing to work your case for a contingency fee. Instead of paying your fees upfront and out of pocket, a contingency fee allows you to pay your lawyer with a percentage of the damages you’re paid.

    Contingency fees are generally not available for divorce cases, small settlements, criminal or child custody cases.

    Awards of attorneys’ fees

    Best for: Someone suing for damages

    Awards of attorneys’ fees work almost exactly like contingency fees. The difference is that instead of your lawyer taking a percentage of your damages, the court orders the defendant to pay your legal fees. This is generally only an option if your lawyer thinks you have a strong legal case.

    Legal payment plans

    Best for: Immigration, defendants in criminal or civil cases

    Ask your lawyer if they’d be willing to draw up a legal payment plan to help you cover the cost of your case. Many have standard legal plans — and not all charge interest or extra fees. Some are also willing to accept a partial upfront payment plus smaller installments over time.

    This could potentially be an easier, less expensive option than third-party financing like a personal loan if you have poor or no credit. That’s because you might not need to prove your creditworthiness to qualify, and you’ll have more room to negotiate your terms. The downside is you could end up losing your legal representation if you fall behind on payments.

    Crowdfunding

    Best for: Cases that the public might stand behind

    Trying to keep costs down? Reach out to your social network to raise money for your legal fees. You’ll likely pay the platform a percentage of the funds you earn, so factor in platform costs when you’re setting your goal.

    Platforms like Funded Justice specialize in raising money specifically for legal cases. However, some people are more comfortable going with name brands like Kickstarter or GoFundMe.

    Credit card

    Best for: Any legal fee you can pay off quickly

    Sometimes the easiest way to pay a one-time legal fee like a consultation is to put it on your credit card. Most law firms accept them, and it’s an easy way to meet spending minimums and earn miles or points. You’ll want to pay it off quickly to avoid accumulating interest, since credit card rates are usually higher than those of personal loans. On top of that, having a high balance can lower your credit score.

    Compare credit cards

    Pro bono lawyer

    Best for: High-profile cases, low-income clients

    Lawyers sometimes reduce their fees or waive them entirely on cases that they think could generate a lot of press or for low-income clients. Some law firms even require lawyers to take on a certain number of pro bono cases each year.

    To find a pro bono lawyer near you, check out the American Bar Association’s list of pro bono programs in your state.

    Friends and family

    Best for: Smaller legal fees

    You can also reach out to your relatives and close friends for help covering your legal fees. You might not have to pay interest and if you do, it’ll probably be a low rate. Just be aware that you could damage your personal relationships if you’re unable to pay it back.

    Am I eligible for a personal loan?

    If you’ve run into some trouble with paying off debt in the past, you could have trouble qualifying for credit from a lender. Generally, you’ll need to meet the following requirements to be eligible for a competitive personal loan:

    How to qualify for a personal loan

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    Rates last updated September 19th, 2018

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $50,000
    4.99%–36% (fixed)
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    580
    $100,000
    4.99%–35.99% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    6.990% – 14.865% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34%–155% (Varies by state) (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    580
    $100,000
    3.09%–35.99% (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640 FICO®
    $35,000
    5.99%–29.99% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.16%–35.89% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)
    OppLoans Installment Loans
    Installment loans with competitive rates from a top-rated direct lender.
    Bad credit accepted
    $5,000
    99%–199% (fixed)

    Compare up to 4 providers

    How much do legal fees cost?

    The total cost of your legal fees varies wildly, depending on on your specific situation and deeds. These are some common fees you might run into in addition to the lawyer’s hourly rate.

    Consultation fee

    Either a fixed or hourly fee for your first meeting with your lawyer, typically paid upfront. Lawyers generally require a consultation before you decide to use their services. You typically don’t need to pay this if you have a flat-fee case.

    Typical cost: Usually based on your lawyer’s hourly rate.

    Retainer fee

    There are two main types of retainer fees. Either it’s a set fee you pay into an account that your lawyer withdraws from as costs build up. It could also act as a down payment on your lawyer’s services and establishes that they’re working on your case.

    Typical cost: Varies widely depending on lawyer and your case.

    Hourly rate

    Pay your lawyer per hour of work on your case. Rates can vary depending on where you live, your lawyer’s seniority and type of legal work. You’ll typically pay more if you hire a senior partner at a law firm in New York City, for example.

    Typical cost: $100 to $400 per hour, as much as $1,000 per hour in specialized legal cases

    Flat fee

    A fee that covers the total cost of your case, common with cut-and-dry cases like an uncontested divorce or drawing up a will.

    Typical cost: Varies by case

    Examples: Uncontested divorce flat fee: $200 to $1,500

    Estate planning: $300 to $1,200

    Contingency fee

    You agree to pay your lawyer a portion of the amount you’re awarded in your case, if you win. Some lawyers offer this fee on a sliding scale depending on how long it takes to settle the case.

    Typical cost: 25% to 40% of your settlement amount

    Referral fee

    A fee you pay to a lawyer for referring you to other legal representation, usually in the form of a percentage of the total fees your new lawyer earns. Referral fees are restricted to specific situations in some states. Visit your local bar association’s website for more details about when a referral fee is appropriate.

    Typical cost: 10% to 50% of total legal fees

    Statutory fee

    A fee set either by a statute or a court that covers your legal costs. Sometimes it’s a percentage of your earnings in a case or a flat rate. Statutory fees are common in bankruptcy or inheritance cases.

    Typical cost: Varies by state and type of case

    5 tips for keeping your legal fees to a minimum

    1. Compare lawyers. Shopping around not only lets you find a lawyer that’s right for your case, it’ll also help you get a feel for how much most lawyers charge for your particular type of case — giving you the confidence and leverage you need when you negotiate your fees.
    2. Have a budget. This seems simple, but knowing exactly how much you can afford to pay in legal fees — including extra financing — can help you weed out lawyers that charge more than you’re able to pay.
    3. Keep calls quick and to the point. Paying by the hour? Time is money. Don’t waste it with small talk and try to prepare questions ahead of time.
    4. Be organized. Clearly label and organize your documents and paperwork. Write summaries of key facts that your lawyer can clearly refer to so they don’t have to spend extra time on busywork.
    5. Ask for six-minute billing increments. Many lawyers give you a choice between six- and 15-minute billing increments. Choosing the smaller one gives your lawyer less of a chance to round bills up and could potentially save you hundreds or even thousands of dollars.

    Bottom line

    Legal fees can deplete your savings and hurt your finances if you’re not prepared. Luckily, there’s usually a way to find financing if you’re caught by surprise or simply can’t shoulder the cost right away. If you can’t find a lawyer to work pro bono and don’t expect a settlement, a personal loan can be a reasonable solution for any case.

    To get the best deal on your legal financing, no matter which way you go, know your rights and your options before agreeing to anything.

    Frequently asked questions

    Anna Serio

    Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.

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