The Truth About Pre-Settlement Lawsuit Loans
When you’re involved in an accident that isn’t your fault, the injustices just seem to keep coming. Not only are you injured and in pain, but you are suddenly out of work and without the money you need to provide for your family. Even though your accident bills aren’t your fault, you are the one left with the pressure of paying them as they pile up.
That’s why some financial companies offer pre-settlement lawsuit loans. They strive to help individuals make ends meet while they wait for their settlement money to come in. Learn more about these loans so you can determine whether or not they’re a good option for you. To discuss your claim in greater detail with our team, call Whibbs Stone Barnett Turner, PA at 850-500-1111.
When the Bills Rack Up After an Accident
Pre-settlement lawsuit loans help people in a very precarious position. If you’ve been injured in an accident and you are unable to work, your bills still need to be paid. Not only do you risk eviction or foreclosure if you don’t pay, your credit score could suffer long-term damage. This seems incredibly unfair when it’s all due to an accident you didn’t cause.
Pre-settlement lawsuit loan companies give you a short-term loan against your eventual settlement, ensuring that you have the funds you need to pay bills, feed your family, and meet other obligations.
How Pre-Settlement Lawsuit Loans Work
Pre-settlement lawsuit loan companies look at your claim and information provided by your lawyer at your request. They determine whether or not your claim is likely to settle, and from there, they decide whether or not they want to loan you money. You get prompt access to a preapproved sum that you can use as needed.
What If You Don’t Settle?
At first glance, this seems risky. What if you don’t settle? How can you be expected to pay back the amount to the company when you’re already financially behind?
The short answer is that you are not expected to pay it back if you do not receive a settlement or court-ordered award. This isn’t a loan in the traditional sense. It is a non-recourse cash advance. Non-recourse means that they have no way of pursuing repayment if your case is not successful. It’s similar to not having to pay attorney’s fees unless you receive compensation.
This doesn’t mean that you can borrow a ton of money and rest easy without worrying about the outcome of your case. These companies are very careful about protecting their financial interests and they don’t like to take risks. For them to offer you a lawsuit loan, your case must essentially be a sure bet. If there’s a chance that your case won’t settle, you’ll have a hard time finding any company willing to loan you money.
Companies do one more thing to protect their interests. They charge incredibly high interest rates on these loans. The interest rates on pre-settlement lawsuit loans rival those charged on payday advance loans, so you will be paying an absurd amount of interest on the money you receive.
Your Next Step
This setup does, in some ways, take advantage of accident victims who have no other options for meeting their financial obligations. Unfortunately, sometimes it is the only option available. However, before turning to a pre-settlement lawsuit loan, it’s recommended that you explore every other option available. Consider borrowing money from close friends or family members. Get a cash advance from your credit card or just use your credit cards directly. Find out if your job will provide a paycheck advance. You may even want to tap into retirement funds, depending on the penalties you’ll face.
If this is your only option, talk to your attorney to ensure that you are choosing a reputable lender.
Explore Your Options With the Help of Whibbs Stone Barnett Turner, PA
If you think a personal injury claim is your next step, it’s time to talk to the team at Whibbs Stone Barnett Turner, PA. We’ll help you navigate this process and we’ll fight aggressively on your behalf. Let’s set up a time to sit down and talk about your next move. Call us at 850-500-1111 or fill out our contact form to get started.
