Michigan attorney explains how to get workers’ compensation loans and why it is smart idea to get legal representation before requesting loans on settlements for workers’ comp.
Getting hurt on-the-job can turn a person’s life upside down. Many disabled employees in Michigan live paycheck-to-paycheck and supporting a family on a reduced amount of money is a real challenge. Just one financial emergency can be a disaster. Here is some information about getting loans on settlements from workers’ comp in Michigan.
Can I Get A Loan From My Workers’ Comp Settlement in Michigan?
A rarely used section in the Michigan workers’ comp law says a disabled employee can seek a loan from their workers’ comp settlement for wage loss benefits. Only disabled employees who are currently receiving workers’ comp will qualify. Interest can be charged by the insurance company at a rate of 10%. It is common for weekly checks to be reduced until the money is paid back.
If the insurance company objects a loan, an Application for Advanced Payment (Form WC-108) can be filed. A magistrate will conduct a hearing weighing the best interests of the disabled employee against the legal rights of the employer. Situations that might justify workers’ compensation loans include needing money for emergencies, transportation costs, or business ventures that have a reasonable chance of success. Needing to pay bills is not usually enough. These are just some of the reasons people use to get loans on settlements for workers’ comp.
Workers’ compensation loans does not mean that a disabled employee gives up all his or her workers’ comp benefits. It is important to speak with an experienced attorney before making the request for a loan. We have seen claims where a disabled employee gave up too much or put themselves in a worse financial situation. Loans on settlements from workers’ comp should be treated like any other negotiation with the insurance company.
Insurance companies frequently oppose requests for workers’ compensation loans because there is a strong possibility that a disabled employee will recover before the money can be paid back. Some insurance companies also see this request as a sign of financial distress and make low ball settlement offers instead. Watch out for this bad tactic and understand your legal rights! Disabled employees have several options when trying to get loans on settlements from workers’ comp.
Another option is to negotiate a redemption instead of requesting workers’ compensation loans. A redemption is when all workers’ comp benefits are traded for a lump sum cash settlement. Entitlement to wage loss benefits and medical treatment ends but the disabled employee is free to use the money for whatever purpose he or she wants. Settlement money does not need to be paid back. Payment will be made after a redemption hearing and 15-day appeal period expires. Disabled employees can seek to waive the 15-day appeal period and get their money sooner if they need it.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.