Lawsuit loans, also known as legal financing or litigation financing, are a type of funding that is provided to plaintiffs in personal injury cases, including car accident cases, to help cover their living and medical expenses while their lawsuit is pending. Lawsuit loans are typically non-recourse, which means that the borrower is not personally responsible for repaying the loan if they do not win their lawsuit or if they do not receive a settlement or judgment in their favor.

In a non-recourse car accident lawsuit loan, the borrower pledges their anticipated settlement or judgment as collateral for the loan. If the borrower loses their lawsuit or does not receive a settlement or judgment, the lender cannot pursue the borrower for repayment of the loan. Instead, the lender can only recover the debt from the collateral that has been pledged as security for the loan. This means that the lender does not have "recourse" to the borrower's personal assets in the event of default.

It is important to note that not all lawsuit loans are non-recourse. Some lenders may offer recourse lawsuit loans, in which the borrower is personally responsible for repaying the loan regardless of the outcome of their lawsuit. It is important to carefully review the terms of any lawsuit loan to understand whether it is a recourse or non-recourse loan.