Legal financing companies have become more readily known in recent years. Legal financing companies advance a Plaintiff with a pending personal injury claim money in exchange for a portion of the settlement proceeds. The legal financing companies indicate they provide such funds, allowing a Plaintiff with financial difficulties to eventually accept the best settlement offer rather than being forced to accept a lower offer due to financial constraints. The legal financing companies also note they advance such funds at no cost to the Plaintiff should he / she not prevail in the matter.
At first blush, these financial companies seem to be a good idea for Plaintiffs who need money while their lawsuit is pending. However, many Plaintiffs fail to realize the actual costs they are paying for the advances. The interest rates charged by these companies are quite high; there is simply no way to ignore such. A prospective borrower must also consider that a case could continue for a significant period, allowing the high interest to accrue for such a period. As a result, a borrower could owe a significant amount. The amount could equal the entire recovery in a case, or more. As a Charlotte personal injury lawyer, I have always advised clients against taking such loans on personal injury cases. Based upon my experience, this approach has been a bad idea for clients. I take my client's financial difficulties quite seriously. However, I strive to provide my clients sound advice regarding their cases, including the peripheral matters that arise regarding such. As a Charlotte workers' compensation attorney, I have always advised my clients that the law prohibits assigning the potential proceeds of their workers' compensation case. Thus, such a legal loan is illegal.