Why Obtain a Workers Compensation Lawsuit Loan?
A workers compensation lawsuit loan is sometimes referred to as a pre-settlement loan. It works as a cash advance against your future settlement or award. Typically, you use this method if you have a pending lawsuit with the possibility of receiving a substantial amount of money. It puts cash in your pocket while the lawsuit is moving through the negotiation stage and into the trial stage if necessary.
Although lawsuit loans may be taken out for a variety of lawsuits, they are most commonly used for personal injury lawsuits. This helps you if you have been injured and need the cash to help cover lost income, daily expenses or medical bills.
How Does a Workers Compensation Lawsuit Loan Work?
Once your attorney files the lawsuit, you can apply for a workers compensation lawsuit loan with a lending company. The company will do some research to evaluate your case to determine if you might receive a significant settlement or award. The company will base its offer of a cash sum. You come to an agreement to pay back the amount with interest and a funding fee, but this money comes out of the future settlement. You pay nothing while the lawsuit is pending. You repay the loan after receiving the award or settlement.
Who Needs a Workers Compensation Lawsuit Settlement Loan?
Lenders will sometimes offer a lawsuit loan to a plaintiff in a workers compensation lawsuit. It is a type of personal injury claim. If you have been the victim of a workplace injury, you may have a strong claim against the employer. However, it can take years for a lawsuit make it to trial, so the employer may make you a settlement offer. Typically, the first offer is inadequate to cover your losses.
Having the cash available from a workers compensation lawsuit loan allows you to wait for a better offer or go to trial. This is especially helpful if you are unable to work due to the injury, which means lost income. Your living expenses and medical bills continue to grow as your savings become depleted. A lawsuit loan may help in these circumstances.
Funding a Workers Compensation Lawsuit
Lawsuit lending is a relatively new financial product designed to help plaintiffs who expect to win a substantial judgment or accept a sizeable settlement. Here’s how they work.
When you file the workers compensation lawsuit, you can research several lawsuit funding companies. Check with each to determine their fees and interest. The company will gather information on your case. Frequently, this means they will contact your attorney for documents. Based on their evaluation, the company will offer you an amount of cash. In exchange, you make an agreement to pay the company the principal amount plus a funding fee from the proceeds of your judgment or settlement. Most companies do not require you to make payments while the case in pending, and many will not expect repayment if you lose at trial.
Repaying the Workers Compensation Litigation Funding Lender
You repay the loan from the proceeds of the settlement or trial award. In general, when you obtain a judgment or reach a settlement with the defendant, some specific expenses will be paid before any other expenses. This includes your attorney’s fee, litigation expenses, court costs, process server fees and medical liens. The liens may come from hospitals, doctors or other medical providers. The lawsuit lender will be paid next, and the balance is paid to you.
It’s difficult enough to try to recover from a workplace injury. When you can’t work, it is even harder to keep up with the bills. A workers compensation lawsuit loan may be a great method to stay on top of the bills.