Can You Borrow Money From Your Personal Injury Lawsuit?
It can happen to anyone – a sudden, accidental, serious personal injury. If you are injured because another driver, a property owner, or a corporation has been negligent, you are entitled by the law in this state to compensation – but obtaining that compensation could take some time. This is where an Edinburg car accident law firm can help.
Here in Texas, when you are injured because another party was negligent, you have the right to full reimbursement for all of your injury-related medical expenses, lost wages, and more. But even in the best scenario, it can take a few weeks to receive that reimbursement.
Complicated personal injury cases, however, can take a year or more to resolve. If you can’t work because you’re injured and if you’re like most people – and your savings aren’t extensive – how are you going to meet your responsibilities while your case is pending? Keep reading.
This will be a brief look at “lawsuit” loans, their advantages, and their disadvantages. If you have a pending personal injury claim, you may be able to obtain a lawsuit loan fast – within 24 hours. But should you do it? Is a lawsuit loan really a good idea?
WHAT CAN A LAWSUIT LOAN ACCOMPLISH FOR YOU?
Obviously, if you need immediate cash while your personal injury case is pending, a lawsuit loan can provide it.
And by easing financial pressures, a loan against your expected payout can give you additional time to negotiate a better settlement. If a reasonable settlement is not offered in private negotiations, a lawsuit loan can give you the time and capacity to take your case to court.
Another advantage is this: If your attorney fails for any reason to obtain a settlement and then fails to win a jury verdict on your behalf, you do not have to repay anything to the lawsuit loan lender.
With most lawsuit loan lenders, there’s no credit check, employment requirements, or up-front fees. The lender usually contacts your accident attorney to verify the facts of your case, and if the lender is persuaded that your personal injury claim will prevail, your loan is approved.
WHAT ABOUT LAWSUIT LOAN INTEREST RATES?
What are the drawbacks and disadvantages of lawsuit loans? They’re substantial. Because you do not repay a lawsuit loan if a jury refuses to award compensation, the lender takes a genuine risk. As you can probably guess, that means extraordinarily high-interest rates.
Lawsuit loans are marketed by telling you about the monthly interest rate on the loan – usually from two to about four percent – rather than telling you the annual interest rate, which in some cases can be as high as sixty percent.
If your personal injury case is complicated, goes to trial, and takes two years to resolve, you could wind up having to pay two or three times what you borrowed from a lawsuit loan lender – and you could be left with nothing at the end of your personal injury trial.
IF YOU CAN’T WORK, DO YOU HAVE OTHER OPTIONS FOR QUICK CASH?
If you’ve been injured, if you are seeking compensation, and if you need cash immediately, consider the other alternatives before you apply for or accept a lawsuit loan:
1. Are there any applicable insurance policies that might offer quick help?
2. Are you eligible for any federal or state benefits?
3. Could your credit union or your bank make a loan to you – with a lower interest rate?
4. Can you borrow cash from a relative or friend?
IF YOU MUST HAVE A LAWSUIT LOAN, WHAT SHOULD YOU KNOW?
If these alternatives are closed to you, and if you’re seeking a lawsuit loan, you need to do some serious, in-depth research regarding lenders, terms, conditions, and the ultimate real cost of a lawsuit loan.
Lawsuit loans are offered to injured persons who are making personal injury claims arising from vehicle collisions and other scenarios where someone is injured by another party’s negligence.
Here in south Texas, if you are injured in a vehicle crash – or in any type of accident caused by another party’s negligence – seek medical treatment immediately, and then, as quickly as possible, arrange to speak with an experienced Edinburg auto accident attorney.
WHAT WILL AN ACCIDENT ATTORNEY DO FOR YOU?
When you choose to file an injury claim after you’ve been injured by another person’s negligence, your accident attorney will:
1. investigate your injury and how it happened
2. review the pertinent insurance policies
3. interrogate the witnesses and assess the evidence
4. determine which party or parties are liable
5. hold liable parties accountable
6. aggressively negotiate for the maximum available compensation on your behalf
The overwhelming majority of personal injury cases in Texas are settled out-of-court. However, if a case can’t be resolved in private negotiations, your attorney may recommend going to trial to obtain the compensation you need and deserve.
If you have no alternative to a lawsuit loan, you must have the lender fully disclose the terms and conditions of the loan, and you must fully understand what it is that you’re signing. You’ve already been injured, so don’t do something that could hurt you further in the long run.
WHEN A PERSONAL INJURY CLAIM IS RESOLVED, WHAT HAS TO BE PAID?
When your case is finally resolved, either through negotiations or by a jury, that’s when some of the trial-related expenses have to be paid, including:
1. Attorney’s fee: An attorney’s fee is typically thirty-three to about forty percent of the final compensation figure.
2. Lawsuit expenses: Additional expenses may include everything from copying machine fees to a fee paid to an expert witness.
3. Medical liens: Did you seek any medical services from any healthcare providers on the basis of a medical lien? A medical lien must be paid from your compensation – before you receive a cent.
After these expenses are covered, if you received a loan against your lawsuit, the lawsuit lender must be paid from the remainder.
HOW MUCH DOES IT COST TO LEARN MORE?
Texas accident attorneys provide a free, no-obligation legal consultation to the injured victims of negligence, so there’s no cost to learn more about your legal rights and options.
If you bring a legal action, an experienced Edinburg auto accident attorney will represent you on a contingent fee basis, which means you’ll pay no attorney’s fee until a settlement or verdict is recovered on your behalf.
If you’ve been injured by negligence in Texas, full compensation for your losses is your right. So is a good accident lawyer’s advice and representation.
By Chris Brasure
Brasure Law Firm, PLLC was founded by Chris Brasure in 2006. His legal accomplishments are diverse and numerous. He is a fellow with the Texas Bar Foundation, was a delegate in the American Bar Association House of Delegates and holds a BA in political science and speech communication from Baylor University. He then went on to obtain his law degree from Baylor University Law School. Chris believes that education is absolutely critical to one’s success, so his firm now offers The Brasure Law Firm Scholarship to give back to the community and to help students who are seeking to pursue a higher education.