Borrowing Money when You Have a Pending Personal Injury Case
November 3, 2022
When a person has a pending Personal Injury case they frequently incur a tremendous amount of debt.
There are companies that will lend you money and get repaid out of the eventual settlement. So you can take loans on pending personal injury cases in Illinois.
Sounds good! But, wait-read the fine print and interest rates.
The interest rates are typically 27% to 60% and are often compounded monthly.
On a $25,000 loan it can cost you, maybe, $12,000 to $15,000 in just one year. After two years the amount to pay back can exceed $30,000.
Insurance companies delay, delay paying you what is rightfully yours. After a while the interest on a Personal Injury loan can actually eat one’s entire settlement.
A BETTER WAY TO HANDLE YOUR BILLS IS THROUGH A CHAPTER 13
Rather than borrowing money to pay bills consider filing a Chapter 13 case administered by the US Bankruptcy Court.
Generally in a Chapter 13 bankruptcy plan with a pending PI case the payment is very low with a special provision, as follows:
In Illinois upon final payment you get to keep the first $15,000 to 19,000 and the balance goes to pay off your creditors. No additional interest and you get to keep the lawyer you hired. You will get more of the money you deserve.
With a small Chapter 13 payment you don’t have to let the Insurance Companies beat you down to a reduced settlement.