The Settlement Loan Las Vegas: Dangers of Pre-Settlement Financing, by The Injury Firm
Have you been injured in a car accident or premise liability incident? If so, then you may be curious if there is any way to get money from your case, without having to wait until the resolution of the matter. Unfortunately, attorneys and lawyers in Las Vegas, Nevada are legally barred from giving funds or loans to their clients. This is an ethical obligation that is mandated by the Nevada Professional Rules of Conduct. If they fail to follow this rule, then they can face serious consequences and even lose their license to practice law. However, it is possible to get a loan secured by your personal injury case if you go through a third party. But there are some things that you should know before seeking a settlement loan on your Las Vegas personal injury case.
Settlement loan consideration 1: They are extraordinarily expensive.
First and foremost, please realize that it is going to cost you a lot at the resolution of your case to even get a small loan. These loans have extraordinarily high-interest rates. It is almost akin to predatory lending because the loan companies know that people seeking money from a personal injury case are likely to be in some sort of financial bind, in pain, and may therefore not have the best judgment when it comes to shopping around for the best interest rate. Additionally, from a business perspective, the loan companies do take a substantial risk on these loans. They are relying on factors that are completely out of their control: the facts of the case, the success of the attorney pursuing the case, and the injured party making a viable claim and providing facts that support their side of the story.
As a result, the interest rates that these companies use are horrific. Many companies will try to use loopholes to charge more than the legal limit, by treating the loans as secured loans, instead of personal loans, which is all they essentially are. Other companies will charge insane loan origination processing fees or legal fees every time that you get a loan. Some will even compound your interest by doing a loan on the entire outstanding amount if you chose to get more than one loan through the same company. All very important things to be aware of. Be wary and consult with an experienced attorney at the Injury Firm Las Vegas before even considering obtaining a loan from your personal injury case.
Settlement loan consideration 2: They can take longer to pay off.
Another reason that the loans could cost you a lot of money compared to other types of loans is that the loans are usually outstanding for longer periods of time than other types of loans, like payday loans because the loan is not paid off until the resolution of the personal injury case. Car accident and premise liability cases can take years to resolve. This means that you could end up paying years of interest on your pre-settlement financing. Even a relatively small loan could end up costing you thousands of dollars in fees and interest.
Settlement loan consideration 3: You could be left with nothing.
You must also consider that there is a chance you get nothing or close to nothing at the end of your personal injury case. Personal injury cases are highly unpredictable. Things do not always turn out the way that you want them to and sometimes, the value of the case is affected. Compound that problem with the interest rates of these types of loans along with the duration of the loan period, and the loan could eat up most of what is leftover.
Settlement loan consideration 4: Keep it local.
Many of the pre-settlement companies that you see on TV are organized and operate in states that have the least stringent financing laws. So their interest rates will be the highest. Therefore, the best practice is to deal locally, with companies that are organized and operate in Las Vegas, Nevada. Not only does it make it easier to actually get the loan, but it is also easier to get someone to talk about the loan when you deal locally. If it is absolutely, 100% necessary for you to get a pre-settlement loan than go with a local company. Go with a company that your attorney has worked with in the past so they can tell you what to expect from that particular company.
If you have been injured or suffered an injury in a car accident or premise liability case, contact our law office so we can explain the ins and outs of pre-settlement financing and any other aspect of your case.