You are injured on the job are are unable to continue working. You get into a car wreck that renders you unable to do your job. Do you lose your job for unlawful reasons. Whatever the cause is for your personal injury lawsuit, in most cases, you’ve been out of work for a long time and are in desperate financial position. Your lawsuit could take months or even years to finalize before you see one copper penny from your settlement. Fortunately, because your situation is so common, pre settlement loans were designed to help people in your exact position. The following list of frequently asked questions will help you get an overview of the pre settlement loan benefits and considerations so that you can determine if it is the best move for you.
What is a pre settlement loan?
The pre settlement loan is designed to provide you with a portion of your settlement to get by on until you your case concludes. If your lawsuit ends up being in your favor, the pre settlement loan funding (with applicable fees and interest) will be taken out of your award. One of the greatest pre settlement loan benefits is that if you do not win your case, the pre settlement loan company who issued you the money will not require you to pay it back.
What are the pre settlement loan benefits and drawbacks?
Pre settlement loan benefits: As mentioned, when you are going through a personal injury lawsuit, you usually are in a difficult financial position. Many times, insurance companies and defense lawyers employ a tactic called “defend delay and deny” in these cases. This simply means they drag out the process as long as they can so that you get so financially desperate but you will agree to a settlement far less than you deserve. Using a pre settlement loan ensures that you have enough money to live on so that you can hold out for everything that you are owed, without losing your home in the process.
Pre settlement loan drawbacks: Sometimes, the pre settlement loan rates are higher than that of more contemporary loans. To make sure that your settlement adequately covers your loan and any related fees and interest, your total loan amount will only be a small portion of what your total settlement will be.
My unemployment situation has created bad credit. Can I even qualify for a pre settlement loan?
Most people who need a pre settlement loan are in your exact position. You’ve been out of work for several months, have no way of paying to put food on your table, let alone keep up with your credit card payments to maintain your credit score. For this reason, the pre settlement loan funding is not based on your credit score. The loan company who reviews your situation to make a lending decision will not even check it. Your qualification depends on the circumstances of your case, and the amount you receive depends on how much you stand to gain in your settlement.
What factors are considered in determining advance amount?
Every case is different, but in most cases your pre settlement loan amount will be based on the following considerations:
- The liability of the defendant to pay the damages.
- The extent of your injuries.
- The total of your medical bills, lost wages, and other pain and suffering costs.
- Any insurance companies that are involved in the lawsuit and the coverage limits that both you and the defendant have.
- The laws in the jurisdiction in which the accident occurred.
How do I go about getting a pre settlement loan?
Your personal injury attorney will likely help you through the presettlement loan process. You simply need to call a pre settlement loan company to get the ball rolling. It’s a good idea to contact several companies to make sure you get the best terms and rates. Make sure to ask about additional fees (such as application and processing fees) so that you know exactly what you will be paying for in your loan. After getting the supporting documentation from your lawyer, you will be sent a check.
Do you have any other questions about getting a pre settlement loan? Please share them in the comment section below.