In the past, an injured accident victim had to watch the bills pile up before receiving any type of award, after pursuing a personal injury lawsuit. Many insurance companies took advantage of that fact, and pushed policy holders to accept an early, but small settlement. Now some accident victims get enticed into buying personal injury lawsuit loans. That is why it helps to talk with a personal injury lawyer in Grande Prairie before taking a decision.
Companies that offer such loans seek to offer a product that sounds like a gift from heaven. Some of them refer to their product/loan as a pre-settlement fund. Others give it this name: non-secure financial assistance. Each name showcases a different feature.
The loan’s most noteworthy characteristics:
It is a cash advance that has been made against a future settlement. The person seeking the loan does not need any collateral; the promise of money in the future serves as the collateral. Families awaiting the money from a settlement may go after such loans, also known as pre-settlement funds.
The loan’s enticing features:
Any accident victim can go online any time of the day or night and apply for a lawsuit loan. An underwriter employed by the loan-granting company studies the personal injury case of the victim that has applied for the financial assistance. If the applicant has a strong case, and one that promises a big award, the underwriter will OK delivery of the requested money.
The applicant does not have to have a good credit record. Accepted applicants receive an amount of cash that equals about 20% of their case’s value. That small amount gets followed by the actual award money.
The loans’ less-desirable features:
An accident victim that receives one of the lawsuit loans has no way of knowing what information might go into the contents of his or her personal injury file. The companies that offer these loans charge a high rate of interest. Moreover, that interest gets compounded each month. The loan must be paid-off when the victim receives the long-awaited award money. The victim’s lawyer must agree to cooperate with the loan company. The applicant must waive his or her attorney-client privileges in order to obtain the cash advance/loan.
Certain fees can add to a given loan’s cost. For instance, the loan-granting company might charge an underwriting fee, an application fee, an origination fee or a review fee. Indeed, an applicant might have to pay 2 or more of those special fees.
Possible alternatives to the lawsuit loans
Offer to furnish a medical provider with a letter of protection. This is sort of like an IOU; the patient promises to pay upon the arrival of the settlement money.
• Take out a bank loan;
• Borrow money from friends or relatives;
• Use credit cards to charge for purchases.