If you have been injured by another person’s negligence in Georgia – in a traffic crash or in any other accident scenario – you might very quickly find yourself in a financial jam.
As a car accident law firm, we know that in Georgia, the injured victims of negligence have a legal right to full compensation for their accident-related medical bills, lost wages, pain, and suffering.
However, that compensation is neither instant nor automatic.
To obtain it, you will have to prove that you were injured by negligence and that you qualify for compensation. That can sometimes take months – and even longer if your claim is disputed and your case becomes a personal injury trial.
Can You Meet Your Obligations While Your Injury Case Is Pending?
Moreover, if you are unable to work because you’ve been injured, the bills can pile up fast. What can you do to meet your obligations while your injury claim is pending?
When faced with mounting medical expenses and no income, some of the injured victims of negligence are choosing to take out a “lawsuit loan” against the amount they expect to receive from their lawsuits.
What exactly is a lawsuit loan? A lawsuit funding company in effect purchases your right to all or part of your verdict or settlement. In return, you receive an advance while your claim is pending.
Is A Lawsuit Loan Really A Good Idea?
A lawsuit loan may not always be a wise idea. After reading what follows, you will have to decide that answer for yourself in your own situation. You are about to learn both the pros and cons of lawsuit loans and the lenders who offer them.
Unless you have absolutely no other choice at all, you probably should not borrow from a lawsuit loan operation. Why? Fox Business News tells us that some borrowers pay an annual interest rate – or what the lenders call a “fee” – exceeding 100 percent of the loan.
When this happens, and a victim of negligence wins or settles an injury claim, that injury victim may already owe every cent of the verdict or settlement to a lawsuit lender.
Why Are Lawsuit Loan Interest Rates So High?
The lenders explain that the interest rates are high due to the risk; if the borrower fails to obtain a settlement or win a jury verdict, no repayment is required.
When someone applies for a lawsuit loan, the lender reviews that person’s personal injury claim, and if the lender is convinced that the claim will prevail, the loan is approved.
Most lenders who offer lawsuit loans charge from two to four percent interest, but here’s the catch; that interest is compounded monthly, not yearly. If your case remains pending for two years, a $1,000 loan at four percent monthly interest winds up costing you over $2,500.
What Are The Advantages Or The “Pros” Of A Lawsuit Loan?
1. As mentioned previously, you only repay a lawsuit loan if your lawsuit prevails.
2. A lawsuit loan really can provide the financial “breathing space” you need to cover medical bills, living expenses, and your other obligations while your lawsuit is pending.
3. By relieving financial stress, a lawsuit loan can give you more time to achieve a better settlement. If a fair settlement is not offered in out-of-court negotiations, a lawsuit loan may give you the financial ability and enough time to take the case to trial.
What Are The Disadvantages Or The “Cons” Of A Lawsuit Loan?
High interest rates are the leading reason for avoiding a lawsuit loan. Some personal injury cases take months or even years to resolve. Interest rates for a lawsuit loan can run as high as sixty percent a year.
For example, the interest on $25,000 can cost you $12,500 or more in one year. If a case takes two years to resolve, you’ll pay back $32,000 – in addition to the actual $25,000 that you borrowed.
Lenders who offer lawsuit loans are taking a considerable risk. They only approve lawsuit loans if they are persuaded that the borrower will win a settlement or verdict. Personal injury victims may apply to five or six different lenders before finding one that will approve a lawsuit loan.
What Can Lenders Charge For Lawsuit Loans?
There are almost no restrictions on how much lenders can charge for lawsuit loans or what they can say in their advertising. One lender may market the product as a “loan” while another lender calls it an “advance.”
If you must have cash while your personal injury case is pending, consider the alternatives to a lawsuit loan: insurance proceeds, disability payments, or even a personal loan from a friend or a relative. Your own bank or credit union might be able to make an installment loan available.
If you must have a lawsuit loan, make absolutely certain that your lender fully discloses the conditions and terms and that you completely understand what you’re signing.
Before you apply for a lawsuit loan, and before you consent to sign anything, discuss your options with your personal injury lawyer.
How Can A Personal Injury Lawyer Help?
In this state, if you have been injured by someone else’s negligence, as soon as you’ve been treated by a medical professional, take your case to an experienced Atlanta personal injury attorney.
Most of the personal injury lawyers in Georgia offer the injured victims of negligence a free first legal consultation, so it will cost you nothing to learn more about your case, your rights, and your options.
If you choose to take legal action, Georgia’s personal injury lawyers work on a contingency fee basis, so you will pay no attorney’s fee until and unless an experienced Atlanta personal injury attorney obtains a settlement or verdict on your behalf.
What Are Your Rights As An Injured Victim Of Negligence?
Under Georgia law, the injured victims of negligence are entitled to complete compensation for their accident-related medical expenses, including future medical expenses, lost wages and lost earning capacity, personal pain and suffering, and all related losses and damages.
However, to obtain the compensation that you’ll need after you’ve been injured by someone else’s negligence, you will have to prove that you’ve been injured, and you’ll have to prove that another person’s negligence is the reason why.
You’ll need a good personal injury lawyer’s help, and you’ll need that assistance immediately. If you have been injured by negligence in the state of Georgia, a good lawyer’s help is your right.
Bryce is considered a highly esteemed trial lawyer and a passionate client advocate amongst his peers in the Atlanta legal community. Never afraid to go the extra mile for his clients, Bryce Angell works tirelessly to ensure that each client’s personal injury case gets the attention that it deserves.