Can I Get a Loan Based on a Worker’s Comp Case?
When you are injured at work, the weeks that follow can be overwhelming. Medical bills, legal issues, and communication with your employer create difficult decisions and mounting responsibilities. If you choose to hire a worker’s compensation attorney and file a case, you can push to have your expenses covered. While this takes some of the stress out of the situation, it can get expensive.
This is why many people will take out a loan. While your worker’s comp case is processing, this pre-settlement loan helps cover your medical and legal expenses. The funding allows you to focus on your case until you receive the full sum of your settlement. If you are interested in this type of funding, here’s some more information.
Why do I need a loan for my worker’s comp case?
Workers compensation laws cover millions of employees every year. While all of these claims and cases will last different durations of time, you may need to cover your expenses while you wait. Medical bills in particular can put a financial burden on your family, so you might be looking for relief. Workers comp insurance can also cover recovery costs like physical therapy, medication, and lost wages. A loan can be a helpful solution while you wait to settle your case and receive money for these losses.
How do I receive a pre-settlement loan?
When you decide that you want to pursue pre-settlement funding, you need to work it out with your lawyer. Their firm may have a business loan agency or other loan companies that they recommend for their clients. Before you can obtain this loan, your lawyer has to ensure that your case qualifies for a loan. Most of the time, if your case occurred due to your employer’s negligence, then you qualify for a loan.
Once you apply for the loan, the lending company will likely ask for documentation proving your case, including medical bills. If they see a high chance of you winning your case, you will be more likely to receive the loan. And once your case is settled, you give a portion of your winnings back to the loan company to pay them back. There will also be interest and other fees included in that sum. If you lose your case, you often do not need to repay the loan.
Does a pre-settlement loan have any disadvantages?
While pre-settlement loans can provide you some financial relief in the short term, they may become expensive further down the line. It’s not uncommon for the interest rates on these loans to run between 27 and 60 percent per year. If your case takes several years to resolve, this can add up quickly. In unfortunate cases, this could mean that you receive much less money than the original settlement.
However, it’s important to remember that this varies case by case. This is why it’s always important to work closely with your attorney and find a lawsuit loan that works for you. They will help you find a reputable loan company and an interest rate that matches the outcome of your case. By taking the time to consider your options, you can ensure that you are fairly compensated for your injury and avoid paying too much in fees.
Remember to communicate closely with your lawyer and take their advice seriously. By entering your worker’s compensation case with a clear understanding of your legal and financial options, you can get through the process as efficiently as possible.