Workers’ compensation litigation is not known for being an expedient process.
For claimants awaiting claim and settlement resolution, there are financial assistance programs like settlement loans for workers’ comp from legal funding institutions, alleviate much of that financial strain by providing borrowers with the cash fluidity they need to pay off their bills and meet their basic needs.
One of the advantages of workman’s’ comp loans is that, unlike typical loans, they essentially function as a workers’ comp settlement advance against your case. This means that not only are these loans offered at extremely low (even negligible) interest rates, as low as 1%, they also do not require a credit check, collateral, nor any upfront costs.
The non-recourse nature of workers’ comp settlement loans also means that borrowers will never be asked to pay back their loan should the case fail to settle and allows individuals to borrow without worrying about the outcome of their case.
Why Would I Need a Settlement Loan for My Workers’ Comp Case?
While workers’ compensation laws exist to provide injured employees with the financial protection and benefits they so desperately need following a workplace injury, the actual process of obtaining those benefits can be quite long.
Roughly 90% of workers’ compensation claims (regardless of case strength) result in an extensive litigation process, which in extreme circumstances, can last upwards of two years to three years.
Because workers’ compensation insurance providers bear the responsibility of distributing workers’ comp benefits to claimants, they have an incentive to dispute claims by any means possible.
As such, claimants and their attorneys are often subjected to excessive litigation and a negotiation process which includes the denial of responsibility for injuries and refusal to attribute a claimant’s injuries to work-related activities or accidents.
While attorneys negotiate with insurance providers, claimants are often unable to earn supplemental income, pay off their ever-increasing bills and run out of cash and savings to meet their basic needs like food and housing.
This can lead to extreme financial anxiety. It can have detrimental impacts on a claimant’s quality of life, and result in ill-advised financial decisions such as plunging deeper into credit card debt or engaging in high-risk and high-interest lending options, such as private bank loans.
How to Get Settlement Loans for Workers’ Comp Cases
If you’ve recently suffered a workplace injury or are currently involved in the workers’ compensation litigation process, you are likely to be looking for financial assistance of some kind.
Rather than engaging in high-risk and high-interest private bank lending options, the workers’ compensation attorneys at Krasno Krasno & Onwudinjo strongly recommend applying for workers’ compensation pre-settlement loans from qualified legal funding institutions.
You must follow these 4 steps to secure a workers’ compensation settlement loan:
1. Hire a Workers’ Compensation Attorney
Under Pennsylvania law, all workers’ compensation claimants are eligible to apply for legal funding solutions, like pre-settlement loans, so long as they’re currently represented by a workers’ compensation attorney.
Un-represented claimants are often ineligible for legal funding, as a law firm is often required for the loan application process.
As such, the first step in securing a workers’ compensation settlement loan is to ensure you’ve retained an attorney for your case. If you’ve not yet sought out or found the right workers’ comp attorney for you, contact the highly qualified and dedicated team of attorneys at Krasno Krasno & Onwudinjo for your free consultation today.
2. Apply for a Workers’ Compensation Settlement Loan with a Reputable Lender
Once you’ve retained an attorney for representation in your workers’ compensation claim, you can begin the pre-settlement loan application process.
Your attorney may recommend legal funding institutions they regularly work with and will assist with the application process. A distinguishing factor in legal funding, compared to that of private bank lending, is that this application process will not require a credit check, bank account, nor any upfront costs.
In most instances, the process will only require a quick consultation with a representative from the legal fund who will analyze the strength of your claim and expected settlement amount to provide you with a proposed funding agreement detailing the size of the advance they can offer and the interest you’ll pay in the event of a settlement.
3. Review and Sign the Proposed Funding Agreement
The proposed funding agreement is the documentation that outlines the terms of your proposed workers’ compensation settlement loan. It will be provided to you and your attorneys following an initial consultation with a legal funding institution.
This agreement essentially functions as an offer letter from the lender, outlining the terms of your agreement, such as the advance amount, interest and any associated fees.
It’s recommended to thoroughly review this agreement with your attorney as it is an essential component of your application. Ultimately, you will be responsible for repaying the loan should your case result in its expected settlement.
4. Collect your Workers’ Compensation Settlement Loan
If all terms of the proposed funding agreement are agreeable to you, and you (and your attorney) make the decision to enter into the pre-settlement loan agreement, the only remaining step is to wait a brief period of time (sometimes as little as 24 hours) before collecting your advance.