Lenders ‘lien’ on dead gal

$2M for 21G loan

Legal vultures are descending on the estate of a dead Brooklyn resident — demanding $2.1 million as repayment for the $21,300 she took out in cash advances so she could file the lawsuit, her family says.

An ailing Theresa Guss had taken out five loans from two legal funding lenders — MFL Case Funding in 2006 and Law Bucks in 2007 — to pursue a slip-and-fall case against the city.

In 2005, Guss, then 54, had fallen in a 4-foot-by-4-foot hole outside her Williamsburg apartment and fractured her hip. As her lawsuit against the city dragged on, she took out the loans, which ranged from $1,750 to $11,200.

Guss agreed to pay them back as soon as her case was settled.

But while she eventually received a $2.1 million settlement from the city, she never saw her cut, an estimated $1.1 million. The money was still tied up in liens slapped against her by the lenders when she died from lingering hip-surgery complications this past January at age 66.

“The game plan was hopefully she was going to win the settlement. We were going to be able to get her out of the nursing home, and she was going to enjoy the remaining part of her life around her family,” Guss’ son, Marc Mueller, told The Post.

“She should have gotten proper care. But we never got to that point because they put the lien on the lawsuit,” he said of the lenders.

Law Bucks is seeking $1.1 million, and MFL Funding wants $1 million, according to court records.

In the case of MFL, Guss agreed to pay 4.99 percent interest compounded monthly, but the paperwork only projected payments through 2009 — and put the total amount at $27,000.

Her agreement with Law Bucks called for a 5.9 percent interest rate but did not spell out that — when compounded monthly — Guss would be paying more than 100 percent annually.

That’s many times the 25 percent limit set by New York state, which outlaws such rates under its “criminal usury” law.

Law Bucks is claiming that the money it gave Guss before she died was not technically a loan because the funds didn’t have to be paid back if she didn’t win or settle her suit.

Still, Guss’s lawyer, Frank Delle Donne, is arguing that when Law Bucks omitted the annual rate in its agreement, it violated a 2005 rule instituted by former state Attorney General Eliot Spitzer prohibiting such an omission, according to court records.

“It’s outrageous what they do,” Donne said. “They want to take every penny. She died in a nursing home and never got to have 1 cent of the recovery.”

A lawyer for Law Bucks did not return a message. A lawyer for MFL, which was bought by a company called Airmont Associates, declined to comment.