If you’ve been injured in an accident or as the result of someone’s negligence, you are likely facing mounting medical and hospital bills. You may have had to spend money replacing damaged property, and your finances may have taken a hit due to lost wages. Your injuries may have either temporarily or permanently prevented you from performing your job, and you are waiting for benefits to kick in to help you get back on your feet. If you have filed a personal injury claim, it can be frustrating waiting for resolution in your case, so that you can get the compensation you need and deserve. Lawsuit lenders are available, offering to loan or advance you the amount of money you’re likely to win in your lawsuit. While these offers may be tempting, many of these companies leave consumers empty handed, taking away money desperately needed for medical bills and expenses. Oftentimes, consumers end up owing more money than what their original lawsuit was actually worth.
What is Lawsuit Lending?
A personal injury lawsuit is initiated by an attorney on behalf of a client who has been injured in an accident or as the result of another’s negligent behavior. The client is referred to as the plaintiff in the action, and the person or organization the lawsuit has been filed against is the defendant. In many cases, an attorney will not charge you in advance for their services. In the lawsuit, in addition to asking for compensation for medical expenses, property damages, and pain and suffering, your attorney will also ask that attorney’s fees be awarded. This is known as a contingency fee. While this saves you the out-of-pocket expenses of hiring a lawyer, there are still other expenses and debts you may incur due to your injury. Waiting for reimbursement for both past and future expenses can present a serious financial hardship for many people. This is where lawsuit lenders come in.
According to the National Conference of State Legislatures, lawsuit financing companies will review a plaintiff’s pending claim to gauge the likelihood that damages will be awarded. If they feel the case has merit, they may offer to advance the person an amount equal to the amount the court may eventually award in the case. The funds are repaid only when, and if, the person wins the lawsuit or the case is settled. The downside to lawsuit lenders is that during the waiting period, funding fees accrue. In addition, interest rates are often steep; in some cases, as much as 200-300 percent. Plaintiffs can easily find themselves in even greater debt than they were prior to winning or settling their claim.
Lawsuit Lending Covered by State Laws
Until recently, lawsuit lenders could get away with unfair lending practices because they weren’t considered a traditional consumer loan. That changed recently. The South Carolina Department of Consumer Affairs ruled lawsuit lending is considered a consumer loan, and subject to consumer credit laws putting limits on the amounts of interest that can be charged. Thus far, South Carolina is only one of a handful of states taking a stand against predatory lawsuit lenders. As awareness of this issue increases, more states have begun to focus on these predatory lenders and to take action to prevent lawsuit lenders from taking advantage of vulnerable people.
Contact Our Experienced South Carolina Personal Injury Attorneys
If you or a loved one has been injured in an accident, contact the Anastopoulo Law Firm today. Our experienced South Carolina personal injury attorneys know the serious, potentially-life threatening injuries caused by these accidents. We will fight to hold responsible parties accountable and help you get the maximum compensation allowed by law. We have offices in Charleston and throughout South Carolina. Call us today for a free review of your case.