When you are the victim of an accident or someone’s reckless or negligent conduct, the process of recovery can be a slow one. It can take time to get back on your feet physically, and you may need ongoing medical care and rehabilitation. In some cases, there are ongoing disabilities that require a new way of doing things you once took for granted. Recovering financially can be difficult too, and your family is likely suffering the effects of lost wages, property damages, and exorbitant medical expenses. While filing a personal injury lawsuit is often the best way to get the maximum amount of compensation you deserve for your injuries and expenses, it can take time to go through the actual process of assembling the kind of strong legal case that gets results. While you are waiting, beware of predatory lenders offering to advance you money based on your personal injury claim. While lawsuit lenders make big claims, dealing with these types of companies can often do more harm than good
The Truth About Lawsuit Lending
Lawsuit lending companies offer to loan money to plaintiffs – injured parties who have filed a court claim and have a pending personal injury or accident lawsuit. They offer to provide cash up front that can help to meet daily living expenses while you wait for your attorney to either negotiate a settlement on your personal injury claim, or to take your claim to court. Lawsuit lenders lure plaintiffs with the appeal of fast money, while glossing over the potential long-term costs and ramifications. According to the U.S. Chamber Institute for Legal Reform, lawsuit lending companies have all the traits of financial schemes which are generally classified as being predatory. These companies work by:
- Offering loans to people involved in personal injury lawsuits;
- Assuring plaintiffs that they will only need to repay the loan when they get a settlement or judgment in their case;
- Charging interest rates on the loan that can range anywhere from 60 percent on up to 250 percent; and
- Charging various additional, hidden fees on top of the already high interest rates.
Unfortunately, the end result is often that the lawsuit lender can end up taking the plaintiff’s entire settlement or judgment amount, as well as requiring additional payments to offset the interest rates and fees. Not only is the person left with nothing from their claim, but they often have medical expenses and additional debt remaining to be paid.
Legislation Against Lawsuit Lending
According to the National Conference of State Legislatures, twelve states currently have addressed the issue of predatory lawsuit lending practices, while only two states, Oklahoma and Tennessee, have currently enacted legislation regarding lawsuit lending. Proposed efforts to protect consumers from lawsuit lending include regulating interest rates, forbidding lawsuit lenders from charging hidden fees, and requiring full disclosure of all terms of the agreement. Until laws are enacted providing basic protections against predatory lawsuit lending practices, consumers are generally advised to steer clear of these companies.
Contact Our Experienced Florida Personal Injury Attorneys
If you have suffered an injury due to an accident or as the result of someone’s negligence, contact our experienced Florida personal injury and accident attorneys today. At Hogan Frick, our attorneys can help you get the compensation you need to cover the damages you have incurred. Contact us today.