Sunday, December 29, 2013

Tip #11--What you need to know about pre-settlement loans or cash advances

After an accident, the injured person may not be able to work and may even lose his or her job. Paying for rent or mortgage, monthly bills, car repairs, or holiday gifts becomes very difficult and the bill collectors start to call, adding great frustration and anxiety to the pain from the accident injuries.

If you were injured in an accident and have financial stress, you may be considering taking out a pre-settlement loan or cash advance through a company that advertises on TV or the Internet. 

In the ads, these loans sound great:  quick turn around, so you get your money fast; non-recourse, which means that if you don't get a settlement or win your case, you don't have to pay the money back.  It almost seems like free money, right?

The pre-settlement loan or cash advance is not "free money."  The money is only given to injured people who have lawyers.  Your lawyer must give a lot of information to the loan company about your accident, the insurance, the liability and your injuries. After the loan company has all this information, and determines that there is a high chance that you will get a settlement, then the company will offer a cash advance, commonly in the amount of $500, $1000 or $2500 depending on the case.

How does the company make money on this advance?  First, they charge an origination fee, and that fee is added onto your loan balance.  Second, they charge interest which is compounded over time.  There is a schedule of how much needs to be paid back if payment is made within three months, six months, one year, etc. which becomes part of your loan paperwork.

In my practice I had one client who received $5000 and didn't get the case settled for a couple years and had to pay back $14,500!  

If you are looking into these loans, be sure to find out how much the company charges for fees and how much will need to be paid back over time.  Because these loans are so expensive, they should be considered only as a last resort, when there is absolutely no other way.  And remember, once you get such a loan, your lawyer will be required to pay the loan back out of your settlement funds.

If you have been in an accident in Wisconsin, please call Hestad Law  608-273-1600 to discuss your case. 

Sunday, December 1, 2013

Tip #10--Documenting time lost from work after your accident

If you are injured in a car accident, you may miss time from work because you are in pain.  You may also miss work time for doctor, chiropractor or physical therapy appointments.  Documentation of your missed time from work should be submitted to the liability insurance carrier as an important part of your accident claim. 

If you have pain that prevents you from working, you need to obtain an excuse from work from your doctor.  The written excuse should be given to your boss or HR Department.  Keep a copy to submit to the liability insurance carrier.  If you need to stay off work longer, be sure to return to the doctor to get another excuse. 

Once you are able to return to work and can work all of your normal hours, you are ready to document your lost work time for the liability carrier.

The best way to document your lost time from work is to obtain a letter from your employer stating the days and hours you missed due to the accident.  The letter should also state how much you make per hour so the liability insurance carrier can easily calculate the value of your lost time.  If you missed overtime hours, then the letter should also state the missed overtime hours and the amount you earn for overtime hours.  If you missed work on the night shift or on a weekend, the letter should state the missed time and the shift differential.

If you are self-employed, documenting your business loss after an accident can be complicated.  It may be necessary to produce a copy of your Schedule C for several years and/or statements from your accountant about your business.

Lawyers at Hestad Law have experience in documenting our clients' lost time from work as well as their self-employed business losses after an injury accident.  Call us today for a free consult about making your claim!  608-273-1600.