Figuring out how to protect your pre-settlement loan money during a recession can be difficult. The U.S. is in the middle of the highest inflation it has seen in over 40 years. That means the stock market is in the doldrums, layoffs are increasing, the Federal Reserve interest rates have been rising aggressively since the 1980s, and consumer confidence is not high. These signs point to a possible recession down the road in the United States.
Thankfully, most courts are finally back to cases moving at the normal pre-pandemic pace after several years of coronavirus-related slowdowns. However, that may not be quick enough if you are a party to one of those lawsuits. Why? Because many injured victims are in difficult financial positions and need money to tide them over while the case is still pending, and inflation doesn’t make it any easier. To help tide injured victims over their finances until the conclusion of the lawsuit, many are taking out settlement advances.
However, during a time of record inflation, if you are a lawsuit plaintiff and have taken out pre-settlement legal funding, then you need to ensure that your money lasts as long as possible, given you may not have any other assets or source of income.
Given that inflation is constantly eroding the value of your money, especially at a time of high costs like the present, there are some steps you can take to protect your settlement loan cash during a potential recession.
Why you should protect your settlement loan during a recession.
While inflation has cooled slightly in the past several months, it is still at highs very few people have seen in their lifetimes. Housing, gas, groceries, virtually everything is more expensive than it was even six months ago.
Often, the injuries suffered during an incident causes people to file civil action that physically prevents them from being able to work. Having to reduce hours because you cannot work at the pace that you used to be able to prior to the accident, or simply not having the time to work between all your doctor’s and other medical appointments due to those same injuries, result in a major financial burden.
Since inflation erodes the value of your money by constantly pushing prices even higher on an already burdened situation, you need every dollar you have to work even harder just to pay your ever-increasing rent, fill your car with gas, and buy food at the grocery store. These are the necessities of life, and it’s not possible to simply decide not to pay your living costs; you need a place to sleep at night and a means of transportation and food for you and your family.
Under the current circumstances, and now more than ever, there has been an increase of people in the same position as you resort to pre-settlement legal funding to help cope with daily increasing costs.
However, since the proceeds of your lawsuit may be all you have during economic uncertainties, it is essential to ensure you do not squander your lawsuit advance. This is true particularly if you have no other income stream during your legal battle, and with prices rising, that money absolutely cannot run out, or you may be in serious financial straits.
Whether or not we enter a recession soon, we’re sharing ways to handle inflation and help you understand how to protect your pre-settlement legal funding money.
1) Cut expenses to only the absolute necessities.
There are multiple ways to ensure your pre-settlement funding cash lasts as long as possible. One of them is to cut your spending to the bare necessities.
Cutting your expenses to only those that are absolutely necessary is not fun, but it can ensure that the lawsuit funds you do have last as long as possible. Budgeting is very important to this process, as the less that you spend, the more that you will have to tide you over until the point at which your lawsuit resolves through either a jury verdict or a settlement.
No one enjoys only spending money on the bare necessities. Still, it can help to ensure that your settlement loan lasts as long as you need it.
2) Track and revise your expenses.
Thanks to inflation, you’re probably spending more than you used to, but you may not realize just how much until you see the numbers. Reviewing and tracking your spending over the past three months helps you understand precisely what you have been spending your money on and see exactly where that money goes. That is perhaps the most essential part of the budgeting process during a recession.
Whether you get a lawsuit loan or not, track what you spend your money on to give you a clear picture of your financial picture, especially when you are involved in a legal case. Assessing your expenditures enables you to spot areas where you may be able to trim your spending and ensure your settlement loan proceeds last just a bit longer.
3) Avoid taking out additional settlement loans if you don’t need the cash.
Taking out multiple settlement loans is possible if you are the plaintiff in a lawsuit, but that does not mean doing so is always a good idea. Keep in mind that every pre-settlement loan you take out is eventually something that must be satisfied from the proceeds of the settlement or jury verdict that serves as the conclusion to your case. For that reason, if you have taken out multiple lawsuit settlement loans when doing so was not absolutely necessary, the other shoe will drop when your case settles, or the jury finds it in your favor. You may end up walking away with less than you could have if you took out more funding than you really needed.
Consider minimizing the amount you take in pre-settlement funding as well as the number of those loans you take out to only those that are absolutely necessary. Also, consider getting a part-time job to increase your income, and use it for your basic necessities to avoid taking out more legal funding.
Overall, during a recession, the less money you owe to a pre-settlement legal funding company, the better for you.
Inflation is at record highs, the U.S. economy looks to be headed into a recession, and there is nothing that you can do about this.
Spending nothing and hoarding your settlement loan is not a possibility, but there are real, concrete steps you can take to ensure that your pre-settlement cash lasts you as long as possible.
Ensuring that you are only spending on the absolute necessities is essential. This process starts with sitting down and making a tough but realistic budget and sticking to it. Not taking out additional settlement loans you do not need will also make the proceeds from your existing loan go further and further maximize the amount you take home when your case eventually settles or goes to trial. Tracking your expenditures helps you figure out what you d not need and what you need to survive. Living within your means allows you to protect your settlement cash advance during inflation.
If you think a pre-settlement loan might be right for you, Baker Street Funding offers lawsuit cash advances with competitive interest rates. Our lawsuit loans have no risk at all, which means you will only pay us back if you receive compensation from your case after winning. Plus, applying for pre-settlement legal funding with Baker Street Funding is quick, and it takes 2 minutes.
Thinking about a lawsuit loan? Learn more about how Baker Street Funding can help.