A common question that has been asked to me is: “Does Cavalry Portfolio Services threatening a lawsuit?” This is a valid concern and I believe the answer is yes. The first time that I heard about these services was while doing research for a current article I was writing on the subject of litigation funding. The question was posed to me as: “Is there a way to avoid a lawsuit and still collect your lawsuit money?”

Cavalry Portfolio Services Threatening Lawsuit

The short answer to this is: Yes, they do indeed threaten a lawsuit. What is their method? A few years back, if you were not properly funded (as in over-funded) there was a simple procedure to prevent you from being able to sue. If the funding company could prove that you did not have the proper funds to handle the lawsuit they would foreclose on your property and repay your deficiency via a lawsuit settlement.

Since that time, due to the lawsuit loans crisis, all funding companies are required to submit an earnest money deficiency to their lenders.

The reason for this is to prevent lenders from taking legal action against them due to non-payment of their lawsuit loans. It is not uncommon for Cavalry Portfolio Services to advise plaintiffs that if they wish to pursue their lawsuit that the funding companies will assist them with the lawsuit loan as long as they put in the right amount of earnest money.

This may be exactly what the funding company is doing, but if they are advising plaintiffs to do just that, it would appear to me that they are suggesting that they are providing plaintiffs with legal advice and that they are advising plaintiffs to lie about the nature of the case in order to obtain the lawsuit loans. This is a violation of their standard business practice.

So why did I say that they are providing a legal opinion?

Well, that is because it appears that they are providing some guidance to the fact that it is likely that they will prevail in the underlying lawsuit. This is by no means a guarantee. One could argue that most plaintiffs are not going to win their lawsuit regardless of the efforts of Cavalry Portfolio Services to assist them in the litigation process.

However, they are banking on that fact to motivate plaintiffs to go forward with the lawsuit even if they are not really convinced that they will win. They certainly are banking on that fact to prevent their competitors from obtaining lawsuit loans from any other source.

This is a very serious issue because it shows the true meaning of the crisis that is currently facing lawsuit funding companies.

There is a desperate need to stop lending to plaintiffs and instead only providing lawsuit loans to those who have a real opportunity to make a profit. It is my belief that this would not only save the financial institution from having to write off millions of dollars from their bad investment on a defaulted lawsuit loan, it would also give plaintiff’s another alternative to obtaining the funds they need. That should be a priority to all those who are involved in litigation.

I sincerely hope that the allegations made against Cavalry Portfolio Services are entirely unfounded and that this whole situation is nothing but a big misunderstanding. If you have been harmed due to bad judgment or reckless lending practices by any of the lawsuit funding companies, you have every right to take legal action against them. These companies prey upon vulnerable people looking for lawsuit funding because they understand that it is easy to get a lawsuit loan when you are in dire need of money. Please, do what you need to do today to put an end to this epidemic.

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