If you are recuperating from a car or truck accident, or an on-the-job injury, who pays the bills while you can’t work? If you are eligible for disability payments, they can be a partial help, but it is usually not enough to make ends meet.
The reality is that there will be a gap between your date-of-injury and the time your case is settled. In many cases, the legal process and negotiations can take a year or longer. During that time, you have bills to pay, and less money coming in.
Many of our clients look to loans or advances from “litigation financiers.” These companies offer advances to cover costs while you are out of work, seeing doctors, and healing from your injuries. The new “Tennessee Litigation Financing Consumer Protection Act” [TLFCPA] went into effect on July 1, 2014. While that may sound like good news for Tennessee consumers, the rates are still sky-high. For example, one company which claims to have low rates, charges 40% interest for a loan of up to one year. You read it correctly, that’s f-o-r-t-y, not f-o-u-r — so if you borrow $1,000, you pay back $1,400!
It is true that you don’t owe them anything if you don’t win your case, but these companies will not advance any money unless they think you will win.
We encourage our clients not to take these loans if there is any way humanly possible to avoid them. If you are familiar with our blogs, you know we always prefer taking a preventive approach, rather than correcting problems later. We firmly believe you should stay healthy and drive safely.
By the same token, you need to take preventive action to avoid going into debt. At Stillman and Friedland we understand how difficult it can be to hold on until you finish your medical treatment. But this is exactly what the insurance companies want — for you to be so desperate that you will settle for anything, and fast!
It is our job to help you avoid this mistake, because once you settle, you can never come back for more compensation, no matter how bad your injuries, and no matter what you didn’t know when you settled!
The best way to avoid this problem is to move from debt mode to savings mode now, before you are injured and unable to work. Then you won’t be squeezed when you have an earnings shortfall and expenses start piling up.
Here’s the major bonus: If you have cash in the bank for these emergencies, you won’t be forced to settle your case quickly for less money. Instead, we can take the time we need to fully develop your case value and then negotiate or litigate the best settlement possible for you. Time is money! And if you are hurt, you deserve the maximum compensation possible by law!
If you don’t have a home budget and a savings plan, have a look at Dave Ramsey’s guide to getting started!
As always, we are here for you anytime,