Pre-settlement loans exist to help injury victims get the money they need to cover their expenses until they get compensation from their personal injury case. After all, it isn’t fair that someone causes your injuries and also leaves you with multiple expenses to take care of. Like everyone else, you have bills for your rent or mortgage, car payment, and utilities, plus the need for groceries.
However, many people who are injured are often left waiting a long time for their cases to be resolved. It’s not at all uncommon since it takes time for your attorney to gather the evidence to prove liability and negligence. If the other party’s insurer won’t offer a sufficient settlement or refuses to pay, then your lawyer will file a personal injury lawsuit.
While the case will hopefully work out in your favor, you will still be waiting to get your money. That means that your debts will keep piling up with all your regular bills plus the ones related to your personal injury.
If you can take out a pre-settlement loan, you likely have a strong case that your attorney feels confident about. But as the proceedings drag on, you may deplete the funds you received from your initial settlement funding.
The good news is that you can get more than one pre-settlement loan from a legal funding company. The number will depend on your personal injury claim and the potential amount of your settlement. There is no set limit to how many pre-settlement loans you can receive, which may be just what you need to reduce your financial burden while your lawyer negotiates a fair settlement on your behalf. Generally speaking, the larger your predicted settlement, the more money you may be able to get through a pre-settlement loan or the more likely you are to be approved for more pre-settlement loans.
Pre-Settlement Loan Basics
Also known as legal funding, pre-settlement loans are for plaintiffs to pay for vital living expenses, medical treatments, and other necessary expenses after sustaining an injury caused by someone else. These non-recourse loans are given during the legal proceedings based on the estimated value of the settlement plus your living expenses.
As mentioned, personal injury cases can go on for years. There are often twists and turns that further complicate the situation. All the while, rent or mortgages need to be paid. You need to feed your family, and you still have ongoing medical treatments for the injuries you incurred in the accident.
Why You May Need Additional Pre-Settlement Loans
Every lawsuit is different; some may resolve more quickly than others, but some can take months or years to conclude. Since a lengthy case is not uncommon, it isn’t unusual to need additional pre-settlement loans.
As an example, medical bills tend to be higher than expected. This is especially true if you get complications from your original diagnosis or you have additional injuries related to your accident.
Other scenarios, such as being unable to work or finding a job that you can do while injured, may require you to take out an additional pre-settlement loan. Disability approval also takes a long time, and while you wait, you could easily run out of the funds you were originally provided in your first pre-settlement loan.
It’s also possible that other unexpected bills will arise as you await the finalization of your personal injury case. When more surprise bills come up, it is good to know you have options to help you stay afloat.
What to Know About Taking Out Another Pre-Settlement Loan
In most cases, a legal funding company will give you only 10% to 20% of your expected settlement. That way, you will be left with a bigger chunk of your compensation even after your lawyer and loan company are paid off.
Borrowing less than this amount means that you should still be able to take out another pre-settlement loan. The legal funding company will need to review your application and determine how much more you could receive.
Some people take the maximum loan amount offered when they first get a pre-settlement loan. If that’s what you did, you may still be eligible to receive more, but only a reassessment will be able to determine if that is possible. Most of the time, plaintiffs can qualify to get additional pre-settlement funding.
Remember, there are no set limits on the number of pre-settlement loans that you can take out. These companies understand that predicting how much you may need during this difficult time is challenging. This is why you will see plaintiffs take out a second or even third loan.
Steps for Taking Out a Pre-Settlement Loan
If you have a personal injury case and are facing financial difficulties, you only need to contact pre-settlement loan specialists to calculate the maximum amount that you are eligible for. Many plaintiffs do not take out the maximum loan, and if you worry about taking less than the maximum, you can always take out a second loan.
Generally, the amount will be determined based on your estimated settlement amount. If this amount increases, you will have even more options for getting funds to cover you while you await your settlement.
It can be very challenging to predict how much money you may need during this time. Most people have never been through this experience before and underestimate the expenses they must take on in addition to their usual expenses.
You may suddenly be faced with needing more surgery or treatment for your injuries, which could deplete all of your current funds. Thankfully, with the option to apply for additional pre-settlement loans, there are ways to take care of the bills without sinking further into debt.