Can I Borrow Money Against my Lawsuit?
When someone is injured, whether in a car accident or due to some other form of negligence, there are often expensive medical bills to pay. Along with bills, people may be out of work for an extended period of time. This also means lost wages from being away from work. Some may even find themselves out of a job altogether. Perhaps this is why many personal injury victims find themselves in dire financial condition while awaiting a resolution on their lawsuit. But it is important to understand all your options before borrowing money.
How long do lawsuits take?
When people ask this question, what they really want to know is how long it will take to recover compensation for their injuries. While it is practically impossible to estimate how long it will take to recover money from a defendant, there are a number of factors that can play a role. If the case involves a straightforward car accident with clear injuries and solid evidence, like witnesses and police reports, it could be as simple as your attorney working out a quick settlement with the insurance company. In some cases, this can be just a few months.
On the other extreme, a person suffering a catastrophic medical malpractice injury may wait four or five years for justice, due to the large volumes of medical evidence, expert reports, and countless depositions that must be taken before either side can fully evaluate the compensation that should be awarded, if any. Even if a case seems very simple, it is important to remember that other factors like the individual adjuster, defense attorneys, the judge presiding over the case, and the availability of witnesses, among many other factors, can greatly influence how long the process takes.
What if I need money now? Can I borrow from payday loan stores?
Understandably, you may need money right away to cover basic bills and costs of living while you await resolution of the case. Attorneys generally recommend their clients avoid payday loans and other high-interest financing, as these can often put the client in a worse position once the money is received. There is nothing worse than waiting years to recover money, only to be forced to hand it all over to a lender. This is not to mention the fact that these companies generally require you be employed and capable of repaying the loan in order to give you money. If the reason for the need is unemployment or disability, this is unlikely an option.
I’ve heard I can borrow against the lawsuit? Is that true?
Yes. There are companies called “litigation finance” or “no-recourse lenders” who will provide you with funding based on the value of your lawsuit. The way these companies work is they give you money – not really a loan – in exchange for a lien on your lawsuit. When you settle or get a verdict, you will be forced to repay the company with heavy interest charges and fees. These companies are not regulated in the state of Florida, because they technically do not provide loans. A lender or traditional finance company must charge interest and has a right to collect, regardless the outcome of a lawsuit. “No recourse” means that if your case is dismissed, you lose, or you do not recover money, they must write-off the money and cannot collect. Therefore, it is a very risky practice to loan money this way. As such, they charge incredible fees (not technically called interest). In many cases, fees can be equal to 400 or 500 percent interest, and they often compound monthly or even daily for years, while you await your settlement.
If you have been injured in the Tampa Bay area, you need a lawyer who will not only fight for your rights in the courtroom, but also explain your rights and look out for you outside the courtroom. For a free case consultation, contact the Romero Law Firm today.