Among the biggest concerns for anyone who has been disabled by a personal injury is how to pay the bills. Whether temporary or long-term, a disabling personal injury limits a person’s ability to work and earn money. It also typically results in indirect costs, such as uncovered medical expenses, property damages, child care needs, long-term care, and other unexpected costs, all of which further threaten the financial well being of the personal injury victim and his family.

Many people injured by no fault of their own turn to personal injury litigation as a means of securing compensation for any lost earnings and unexpected costs arising from the injury. However, personal injury litigation typically takes a significant amount of time to resolve, often leaving the injured party strapped for cash and usually hard pressed to pay the monthly bills and day-to-day living expenses.

To overcome this potential cash crunch caused by the lengthy litigation process, many personal injury victims in Ontario turn to specialized financial services companies that offer creative financing solutions called settlement loans. Not only do these settlement loans help bring peace of mind to personal injury victims by allowing them to pay living expenses and other costs during the lengthy litigation process, but also provide the victim’s lawyer more time to negotiate a fair and decent settlement outcome. This latter benefit should not be underestimated, as financial pres-sures on personal injury victims often lead to the acceptance of unfavorable settlement terms that fail to provide full compensation.

Also known as “litigation loans” and “lawsuit loans,” settlement loans come with no financial risk to the personal injury victim, as the loan is repaid from the settlement amount, or, should the case goes to trial, from the court-mandated award. There are no monthly or interim payments due during the interim, and the personal injury victim is not on the hook should the outcome of the case result in compensation that comes in below the amount borrowed along with any accumulated interest. In such cases, the settlement lender can only seek repayment for any amounts remaining after legal fees and costs have been paid.

What Would Showcase a Typical Settlement Loan Case?

For an example of a fairly typical settlement loan scenario, let’s consider the fictional personal injury situation of Bob Sidelined: Bob was driving to work one morning when he was T-boned by another driver who failed to stop at a stop sign. The accident results in the total loss of Bob’s vehicle, along with extensive injuries to his leg and hip that keep him out of work for over a year and necessitate significant physical rehabilitation. While the insurance companies were quick to agree to cover the costs of replacing Bob’s car, they balk at the $550,000 in compensation Bob seeks for loss of income, medical costs, and other damages. Bob’s lawyer initiates a two-track effort of continuing negotiations and litigation to push the insurance companies to resolve the dispute in Bob’s favour.

Meanwhile, Bob continues to miss work and starts struggling to pay the mortgage and other bills. After discussing his financial plight with his lawyer, they both agree that a settlement loan would be the best means for stabilizing Bob’s financial situation. Based on a balancing of Bob’s estimated return to work and current and expected spending needs, Bob’s applies for an $80,000 settlement loan. After reviewing the merits of the case, the lawsuit settlement loan company approves the loan, giving Bob $80,000 to pay monthly bills and medical costs while he waits out the legal maneuvering. About 16 months later Bob and his lawyer agree to accept the insurance company’s settlement offer of $495,000.

After Bob pays his lawyer’s fees and pays the settlement lender $80,000 plus interest, he is left with the remainder. While perhaps the settlement was not as much as Bob may have hoped for, without the settlement loan he would have been hard-pressed to make ends meet, and may have had to resort to other means — much smaller settlement, sale of home or other valuable assets, for two examples — to support himself and family.

Who is Eligible for a Settlement Loan?

Anyone seeking compensation through the court system for a personal injury claim is eligible for a settlement loan. Personal injury cases can include:

• motor vehicle accidents
• cycling and boating accidents
• public transportation accidents
• premise liability (slip and fall, dog bites, assault)
• workplace injury
• product liability
• medical malpractice
• wrongful death

This adds up to a whole lot of people in Ontario who might be eligible for a settlement loan in any given year, given that well over 50,000 Ontario workers are injured on the job every year, and that almost 50,000 Ontario residents are injured in automobile accidents. Naturally, not all of these accident victims will seek out compensation through litigation, but enough do to make personal injury law an especially busy component of the Ontario legal system.

Are There Different Types of Settlement Loans?

Lawsuit settlement loan companies do not differentiate their loan classes based on the type of personal injury case but offer different settlement loans based on case timing and financing needs. Various types of settlement loans include:

• Basic settlement loan, also known as the pre-settlement loan.
• Post-settlement loans, which offer the same funding terms as the settlement loan, but is designed to tide clients over during the sometimes long period between the signing of settlement terms and receipt of actual payment.
• Treatment financing covers medical and rehabilitation costs in cases in which personal injury victims have been denied coverage by insurers.
• Disbursement financing can be used to pay for expenses related to supporting the client’s legal claim, such as paying for expert witness analysis and reporting.
• Settlement loan re-financing is when a settlement lender refinances a settlement loan originating from a different lender.
• Staged settlement loans provide funding to personal injury clients on a regular basis rather than with one lump-sum payment as a means of helping clients better manage expenses and reduce interest charges.

What Can Settlement Loans Be Used For?

There are no restrictions on what a settlement loan can be used for, but they are specifically designed to help personal injury victims manage their week-to-week and month-to-month financial affairs while awaiting compensation for their injuries through settlement or court action. With this in mind, settlement loans help pay for things like:

• mortgage or rent
• food
• transportation
• medical services or physical rehabilitation
• medications
• and even monthly payment on other debt, such as credit cards

Settlement loans should not be used for non-essential luxuries such as vacations, fashion items, electronics, or recreational items. And if you are prone to treating large cash infusions as “windfalls,” then perhaps consider applying for a staged settlement loan. Not only will this help ensure that you keep on top of your financial needs on a regular basis, but it will reduce the amount of accrued interest.

How to Apply for a Settlement Loan

If you have initiated legal action due to a personal injury make sure you tell your lawyer about all impacts the injury is having on your financial situation. Not only should this information be used to better help determine just compensation, but it helps your lawyer better assess how hard you might be willing to fight in order to receive full and just compensation. In some cases, your lawyer may recommend that you apply for a settlement loan. Or, you may have to ask your lawyer if a settlement loan is the right option for meeting your financial needs during the course of the legal action. In either case, your lawyer is key to the loan, as settlement loan company assessors will rely on your lawyer’s information about the case to determine loan eligibility.

In fact, the merits of your case is the primary factor lawsuit settlement loan companies consider in loan approvals and amounts. Most settlement lenders do not require a good credit history or even perform a credit check as part of the loan processing. Additionally, settlement loan companies do not require the loan be secured by collateral, such as your home, vehicle or another valuable asset.

Whether you or your lawyer files the actual loan application, make sure that you discuss how much you would like to borrow. Your lawyer should have a good idea about how much you might be expected to receive from any settlement or court action, and can help you determine a reasonable amount to borrow that helps meet your current financial needs without sacrificing too much of the final expected settlement or award.

Your lawyer’s involvement in the settlement loan process may also be invaluable because, in some cases, interest costs on settlement loans can be recovered from the defendant.

How much do Settlement Loans Cost?

Because lawsuit settlement loan companies are bearing an unsecured risk of lending money that may not be paid due to a negative settlement outcome, interest rates are typically much higher than they are on other forms of credit, such as car loans, mortgages and credit cards. Competition helps keep interest rates down to some degree, so it always pays to shop around for the best deals. Note that compounding on top of high rates, along with various fees tacked on to the loan by some settlement lenders, ups the costs even more, which is why CaseMark Financial offers single-fee loans, along with a two-year interest rate drop to protect clients from excessive compounding.

The CaseMark Financial Difference

If you have decided to apply for a lawsuit settlement loan, talk to your lawyer about CaseMark Financial. We offer some of the best settlement loan terms in Ontario, through an easy-to-follow application process that fully discloses all terms. Unlike many other lawsuit settlement companies, CaseMark Financial does not apply annual fees, discharge fees, or any other charges beyond a simple $250 administration fee to the cost of the loan.

Our interest rates are in line with rates charged by other Ontario settlement lenders, though with a significant and cost-saving difference — our rate drops at the two-year mark. With many personal injury cases dragging on for multiple years, this two-year rate drop can represent tremendous savings to borrowers that is not offered by other lawsuit settlement loan companies. This protects you from excessive interest charges caused by lengthy settlement terms, leaving you more money when the case finally settles!

In fact, this two-year rate drop is also a prime reason that some clients choose to refinance their existing settlement loans with CaseMark Financial. And, as with our originator settlement loans, there are no hidden costs or fees beyond the $250 administration fee.

Other benefits of securing your settlement loan with CaseMark Financial include:

• Dedicated account management in which you always speak to the same CaseMark Financial representative when discussing your unique case and financial needs.
• Customer priority in which CaseMark Financial strives to respond to settlement loan applications within 24 hours.
• Flexibility, in which CaseMark Financial does not rely on a pre-defined lending formula or guidelines, but instead looks at the merits of each unique case to come up with a customized financial solution to help each personal injury victim meet their specific pre-settlement needs.

CaseMark Financial has helped alleviate the financial burdens of thousands of injured people in Ontario and Canada. Our lawsuit settlement loans help personal injury victims maintain their financial stability while awaiting the drawn-out process of seeking com-pensation through legal settlement. We offer flexible options, such as staged settlement loans that help reduce interest rates and help our clients retain more of their settlement money upon closing. To learn more about CaseMark Financial’s settlement loans and the CaseMark Financial advantage, apply online today, or give us a call at 416-477-3346.