Getting a loan while waiting for an accident settlement

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The Aftermath of an Accident

By now, almost everyone has seen an advertisement for personal injury attorneys. The famous line goes: ‘If you’ve been injured in an accident that wasn’t your fault, you might be entitled to compensation.’

The statement is accurate, and while it sounds straightforward enough, sometimes there are multiple steps involved before you can get your compensation. Firstly, you’ll have to speak to an attorney that specializes in personal injury law. A specialist attorney is the best bet because there are many types of accident cases out there, and the right attorney will have experience dealing with complicated cases.

When to consider filing a lawsuit

There are a few occasions you’d want to consider pursuing a lawsuit. Generally, if you’ve been involved in a car accident, commonly referred to as a “motor vehicle accident” or “MVC,” this would be a case involving any motor vehicle such as a car, motorcycle, etc. You don’t have to be another driver; you can be a pedestrian victim of an MVC as well. In the US, MVC’s are the most common type of personal injury cases pursued by plaintiffs. Compensation from these cases is designed to cover medical, property, and other miscellaneous costs. Often, the injuries can be severe.

Other cases of personal injury claims have included injuries on premises that are open to the public. This includes restaurants, stores, and different types of establishments. Common claims of this type are slip and fall incidents or products falling on customers, among other things. If you are involved in any of these accidents, it’s always best to file an official accident report with the establishment and get photos of the location where you were injured.

The complications of the injury lawsuit process

In order to succeed in your injury case, there needs to be enough evidence that the accident wasn’t your fault, that the person who caused your accident was negligent or reckless, that this is what caused your accident, and finally, that your injuries are a result of the accident. As simple as this sounds, there might be a wait. The entire process may take months or even years to complete as there is much paperwork and back and forth required.

Most cases don’t end up going to trial as many are settled outside of court. Despite this, it may still take months to get your compensation as insurance companies may request a lot of documents and take time to review all of them before granting your settlement.

Suing the other side doesn’t make time stop, and if you are unable to work because of your injuries, you might face mounting bills, rent, and other urgent expenses. In addition to these everyday expenses, you may have to pay medical bills if you receive treatment. With this pressure, you may find yourself under considerable financial strain.

How litigation funding can help

In the meantime, to cover these costs, you can utilize pre-settlement funding. Pre-settlement funding is a term used for various loans and agreements that offer money based on your estimated settlement. Since the funds given rely on the overall payment, it’s different from a traditional loan and is tailored specifically for someone in the process of pursuing a claim.

How do these types of 'loans' work?

While litigation funding is commonly referred to as ‘accident loans,’ this can be misleading as sometimes they don’t come in the form of a traditional loan at all. This is because, in most states, you are not borrowing outright, but rather you are blocking off a portion of your settlement to pay back to the firm that lent you the money.

The process of getting pre-settlement funding is also different from that of a loan. There are two fundamental requirements. First, it goes without saying that you must have suffered an accident and have a pending legal claim. Second, you must also have an attorney representing you. If you fit these requirements, you will be eligible to fill out an application to assess your suitability. You’ll be asked about yourself, your claim, and the details of your attorney.

Once this information is received, funding companies will work with your attorney to determine the viability of your case plus what your settlement is estimated at. After the review, the company will decide if you’re eligible for funding and how much you can get. The stronger the case, the better the outcome.

After you’ve been approved, the company will send you the money via a wire transfer or by check. Once the bank has cleared the funds, it’s yours to use on a variety of expenses. Keep in mind that you won’t be able to use the money on any legal costs. After your case is settled, you’ll repay the amount plus any interest and fees directly from your settlement.

Repaying litigation funding

At this point, you’re probably wondering what happens to your repayment if you lose your case. Usually, pre-settlement funding is advertised as ‘non-recourse.’ This means you won’t have to pay if you lose your case. However, before receiving your funds, you’ll have to sign an agreement. It’s essential to read this thoroughly as it will outline what will happen if there isn’t enough awarded in your settlement to cover the initial funding plus fees and interest.

Sometimes, the company might only want you to replay whatever is left after all the related costs have been paid. However, some companies will make arrangements to collect the rest. It’s essential to make sure that you read and understand your agreement and ask any questions before signing the dotted line.

Find out if litigation funding is for you

Overall, pre-settlement funding is a good option for those who require access to money while they await the results of their lawsuit. Despite the criticisms that it’s a predatory industry, focusing on vulnerable clients by charging high interest, most companies have taken steps to provide more honest and transparent communications about interest and fees charged. With the right information, accident victims may find that pre-settlement funding is the best choice for their circumstances.

Litigation Funding, LLC has relationships with over 250 personal injury attorneys in Michigan and can walk you through the process of receiving process quickly and efficiently. Because we’re Michigan-based, it is exceedingly easy for us to get the cash that you need within 24 hours. Call (248) 353-8830 or leave us a message today to schedule a free consultation. 

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