Why Getting A Cash Advance On Your Accident Settlement Isn't A Good Idea
If you're in an auto accident and can't work, it can be difficult waiting for your personal injury attorney to settle your case. Because of your financial obligations, such as paying your utility bills and buying groceries, you may consider obtaining a cash advance on your settlement. Don't do this. Your personal injury lawyer is working hard to get you the funds you need for your injuries. If you give a settlement buyer access to those funds in the future, you may end up losing in the end. Here's why it's not a good idea.
Can a Cash Advance Really Save You?
Settlement companies promise to give you the money you need right now. You simply pay them back once your personal injury attorney settles your case. Although this seems like a good thing, it may not be.
Your attorney needs time to negotiate a fair accident settlement for you. Because of this, it can take over two years to complete your case. In addition, you may need to have more medical testing and physical therapy documented to finish your case. These unexpected things can substantially reduce your settlement amount.
To avoid losing everything you own, you may panic and call the settlement company and obtain your cash advance. It may appear that all of your troubles are over once you do.
However, the cash advance comes with a price. It came with a high interest rate. A number of business sources report that some settlement companies charge up to 100 percent interest rates on cash advances. By the time accident victims win their cases, they already lost their expected compensation to the settlement company.
What Happens If Your Settlement Amount Is Lower Than Your Cash Advance?
Getting a fair settlement for your injuries is your attorney's goals. But if the insurance company settles for less than you initially expected it to, you'll need to repay the cash advance company out of your own pockets. Your personal injury lawyer can't help you if this happens.
In most cases, the cash advance company may take you to court for the funds you owe. The company can also damage your credit reports if you don't pay.
The best thing you can do is wait for your attorney to finish your case. Also, request assistance from your state to help buy food and pay your utilities.
Although a cash advance seems like the way to go, it's not. If you have additional questions about your compensation or case, contact an attorney such as Glaser Steven J atty for assistance.