Should I take out a loan against a future personal injury settlement?
Get answers from Personal Injury Lawyer Josh Rohrscheib. Learn out more about motorcycle accidents → https://rohrscheiblaw.com/bloomington-motorcycle-accident-lawyer/
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Transcript:
Should you take out a loan against a future personal injury settlement? Hi, I’m Joshua Rohrscheib. I’m a personal injury lawyer in Central Illinois. And generally, my advice would be no, you should not take out a loan against a future personal injury settlement, at least not if there’s any other way you can avoid it. There are several companies that are willing to give pre-settlement loans to folks who have personal injury claims. I’m typically provided that you have an attorney that can help protect the lenders’ interest and that when they review your police report and investigate your case if they are very confident that you have a winning case and enough damages that they can be made whole. There are companies that will lend you money, however, it comes to the price. And price these loans have very high-interest rates. The last one that I looked at that a client of mine insisted on taking out had interest rates of 36%. Now in that case, we were fortunate because we were able to settle the case relatively quickly. So there wasn’t a lot of time for the interest rate to compound and compound and compound. But in some cases, in some personal injury cases where litigation is necessary, the litigation can go on for years, especially right now during the Coronavirus pandemic. So if you have a 36% interest rate loan, and that’s going for years, you can borrow a relatively small amount of money and end up owing an enormous amount of money. So for these reasons, because there’s some lack of predictability about how short of a timespan or how long a time span, you may have this loan out for this very high-interest rate, it’s a good idea to avoid these loans if there’s any other way. Now, I understand that sometimes when you’ve been injured in an accident, and maybe you’re not able to work and your medical bills are piling up and you’ve lost your car. So you can’t know, transportation to your job or your doctor’s appointments. I understand that there are some cases where there really is no other way with there’s no like family member or church or anyone who can help you out with somebody to help you get by while you’re waiting for settlement. For some folks, there’s just no alternative except a pre-settlement loan like these. So to those folks, I just tell them to exercise caution and to just borrow the smallest amount of money that they can get by with for the next couple of months. Because a lender may want to lend you 10 or $15,000. And you may eventually need that much money, but you don’t need that much money immediately. So in those cases, I would encourage you to borrow, you know, two or $3,000. And then when that is almost gone if you need another two or $3,000, the lender will likely be willing to lend you more money. But at least you don’t have interest piling on funds you didn’t need. And if you’re able to get back to work more quickly than you would have anticipated, maybe wouldn’t have needed to borrow the larger amount of money in the first place. So my advice when it comes to loans against future settlements is if there’s any other way that you can kind of make it without taking out these loans to do so if you are in a financial place where you really have no choice but to take out these loans. Do it in small incremental steps because if they’re willing to lend you $15,000 And they loan you $3,000 If you come back next month and eat another $3,000 They’re probably going to be willing to lend that to you at that point. So I hope this advice is helpful. I hope you’ll use great caution when dealing with these types of loans because the interest rates are so high. If you have any other questions about personal injury cases, please reach out we’re happy to help you. And thank you for taking the time to watch this video.