Every day, hundreds of Americans are involved in accidents and sustain serious injuries — either short or long-term injuries. Another person’s negligence often causes most of these accidents. Still, not many victims of injury and accidents are aware of their rights and how to pursue legal redress or compensation. And once a case has been filed and an attorney is hired, financial concerns begin.
Once a victim is involved in a personal injury lawsuit, it can often be hard to understand misconceptions and truths about financing personal injury litigation. Unfortunately, as a result, many eligible victims don’t take advantage of personal injury lawsuit loans because of misconceptions they have about the way they work.
Here, we demystify personal injury loan myths that can stand in the way of getting the money you need.
Myth #1: You are getting a traditional loan, like a bank loan
While personal injury lawsuit funding may seem like bank loans, you are actually getting a non-recourse cash advance you don’t have to repay until you win your case. That also means that the lender won’t check your credit, verify your income or ask for assets in return for the advance.
Unlike bank loans, where you have to pay back both the capital and interest monthly, and they’ll run all kinds of checks before considering you for a loan, non-recourse loans are only paid if you receive proceeds from your personal injury case.
Fact: If you lose the case, you are under no obligation to pay it back. The lender takes the loss.
Myth #2: Personal injury lawsuit loan companies interfere with your lawsuit
Personal injury lawsuit loan companies don’t interfere with your case. They are not in the position to suggest a legal course of action to either the plaintiff or the attorney representing the legal matter.
Ironically, many borrowers who qualify for these advances don’t even realize that insurance companies are behind these false claims. Pressure from the defendants (with deep pockets and resources) who predate on financially incapacitated injured victims is a sad fact in the United States.
Insurance companies are in the business of keeping money, and pre-settlement legal funding is a threat to them. Why? Because insurers want to settle claims early and give low compensation or none at all. The financial support you get can help you get through your financial burden during your case and, hopefully, settle your injury case for fair value.
Personal injury loans serve as financial relief to victims of accidents and their families. And before signing an agreement, borrowers understand the charges involved and that the lender has no involvement in the case.
Fact: The only involvement a lawsuit lender has is that it will get paid from your settlement proceeds.
Myth #3: Personal injury loans are hard to obtain
Often, when individuals who have been injured make this statement, they are referring to the fact that they know others who have been denied funding. However, just because someone else was denied legal funding does not necessarily mean that the same will happen to you. Every case is unique and carries its own level of risk.
To get a loan on your lawsuit, simply fill out an application online, and a funding team will evaluate your application to pre-qualify you. If the case is accepted, a professional team of underwriters will decide with your attorney’s participation whether your lawsuit can get funded.
Fact: Obtaining a personal injury lawsuit loan is actually relatively simple and much easier than getting a traditional loan. There is no need to sign bulky agreements or pay any fees upfront. Additionally, as previously stated, there are no requirements for employment or credit checks.
Myth #4: Personal injury loans are predatory
This is far from the truth regarding reputable lenders, and most people who spread such misconceptions cannot justify those claims. Why? Because, then again, there is a widespread notion that personal injury loans are not regulated pushed by insurance companies. Although they are unregulated in most jurisdictions, most settlement lenders provide the best practices.
For instance, the American Legal Finance Association (ALFA) is just one of the many regulatory bodies overseeing member companies in the United States. There are strict guidelines that check pre-settlement funding lenders, which forbid them from exploiting their clients.
Even without regulation, a handful of lenders are starting to become more competitive, offering rates close to what personal loans offer. And that is without any regard to bad credit history or unemployment, which won’t preclude a potential borrower from obtaining funding.
Personal injury loans also serve as a safety net to relieve plaintiffs of the financial burden incurred on medical expenses, loss of income, and living expenses.
With all these, you can see how this myth is pervasive and a fallacy.
Myth #5: Personal injury attorneys can lend their clients money
You cannot get a loan from your attorney because it goes against the ethics guidelines they abide by to money to clients by using a settlement, award, or civil verdict as collateral.
Professional ethics precludes attorneys from lending money to their clients because it creates a conflict of interest. However, there is another option to help plaintiffs get financial support during litigation. Attorneys can recommend personal injury loans to their clients to alleviate financial burdens.
Recommending a lender is not the same as lending.
Furthermore, personal injury loans are also available to attorneys working on contingency in need financing. Attorneys can use personal injury lawsuit funding to pay expert witnesses, hire investigators, and more.
Takeaway
Personal injury lawsuit financing is not for everyone, but if you need funds right away and qualify, there can be significant benefits.
The key to getting funding is to not let misconceptions get in the way of understanding your financial options. And while thinking about getting a personal injury loan, funding your case with a legitimate lender, like Baker Street Funding, can mean a lot of money saved from your expected settlement in the long run.
We know that funding can be confusing, so Baker Street Funding has created a Lawsuit Funding Resource Center to help you navigate your settlement advance.
If you are ready to get funding for your personal injury lawsuit, apply for a lawsuit loan in minutes. Get a quick response in time and get your injury case funded in no time.
