Why You Should Think Twice About Taking A Legal Loan
Times can get tough after an accident. You may not be able to work for an extended period of time and the 60% of wages that PIP (Personal Injury Protection) coverage pays may not be enough to cover all of your bills. You need compensation now but your treatment is not complete and therefore, your attorney cannot send out your demand to the insurance company. What are you supposed to do?
Some might suggest that you take out a legal loan. In accordance with the Florida Bar Rules, attorneys are not allowed to loan clients money. However, there are companies that will provide you will a legal loan until your case settles or reaches a verdict. As soon as the money is loaned, interest is accrued each month until the case is finished and the money is paid back.
Now, there are two very important things to consider when thinking about taking out a legal loan. First, remember that a legal loan has to be paid back PLUS interest. This is not free money. Therefore, when a settlement is reached, you will not be entitled to as much as you were previously entitled to because you have to pay back the loan company the original legal loan amount PLUS interest.
Something else to consider is that your mind may be clouded due to the rising interest. Your attorney can advise you as to the merits of your case but ultimately, it is your case. If you tell your attorney to settle the case because you want the legal loan interest to go away, then your attorney must settle the case. But, you may be leaving compensation on the table.
Our suggestion is to only take a legal loan if it is ABSOLUTELY necessary. Something such as needing money for rent, a utility, or some kind of emergency. Moreover, if you do take a legal loan, only take the amount that is needed at the time. Do not take extra.
If you have any questions or concerns about legal loans, the personal injury attorneys of the Nicoletti Law Firm would be happy to help you. Call us today at (727) 845-5972. We are always available for you!