An accident injury attorney in Maryville, MO typically encourages clients not to accept a low settlement offer from an insurance company, but negotiating a better offer can take many months. What happens if the person really needs money now or risks being evicted, having a vehicle repossessed or losing the house to foreclosure? One possible option would be to acquire a special type of loan that is commonly called a lawsuit loan or a settlement cash advance. It’s essential to understand potential problems involved with this decision, however.
First, the money must be paid back. That may seem like an obvious point, but it can be easy to forget about while dealing with physical recovery, incoming bills, and the frustration of waiting on a settlement. This is a primary reason that lenders who offer these loans keep the amounts relatively small. The amount might be only 10 percent of the settlement expected by an Accident Injury Attorney in Maryville, MO.
The second reason is that an expected settlement may never come about; the final offer from the insurer may be lower because of unforeseen circumstances. Perhaps the insurer discovers that the claimant falsified information on some documents, for example. That’s why an expected settlement of $15,000 may only be good for a $1,500 cash advance. That amount of money may barely be enough to offset the bills that are due right now. Within the next month or two, the individual may once again be facing a dire financial situation.
Second, interest rates on these loans are higher than for many other kinds of loans. If the settlement takes a long time to negotiate, the borrower might need to pay the $1,500 principal plus another $1,000 or more in interest charges once the money comes in. A person who has other ways of borrowing money might find those options to be more advisable solutions.
An attorney like Stephen W. Holaday looks out for his client’s interests. This lawyer can provide insight as to whether taking out a loan against an expected settlement is reasonable or not depending on the individual’s circumstances. Please visit the website to learn more about this particular attorney.
