Michigan attorney gives reasons why workers’ comp lawsuit funding is a bad idea and offers a better solution through settlement.
We understand that many people live paycheck-to-paycheck and getting hurt can result in extreme financial distress. The promise of quick money is an attractive option when someone is unable to pay rent or put food on the table. Unfortunately, attorneys cannot ethically loan money to a client. Workers’ comp lawsuit funding companies sound like an attractive option but there are major issues.
Michigan law prohibits excessive interest rates when an individual is loaned money, but an exception is allowed for lending institutions. It is normal for credit card companies to charge interest rates exceeding 20%. This article should be a wake-up call for anyone who is considering workers’ comp lawsuit funding. Here are some reasons why it can be a bad idea and how to get relief in other ways.
Reasons Why Workers’ Comp Lawsuit Funding Is A Bad Idea
• Reputable companies don’t usually loan money
We are frequently contacted by workers’ comp lawsuit funding companies. They call us because one of our clients has filled out an online request form or called a 1-800 number. These funding companies almost never approve the loans when they find out that settlement money goes straight to the client and cannot be held in our trust account. This is usually the end of the road and a huge waste of time.
• High interest rates and excessive fees
Many of these companies offer bad deals on the money they lend you. Individuals can expect to pay high interest rates and excessive fees. We have heard of some companies charging interest rates over 50%!
• Potential conflict of interest can impact representation
Workers’ comp lawsuit funding companies quickly become a nuisance to lawyers. They want to discuss confidential information, including medical, before releasing any funds. Frequent calls about case status and pressure to settle can be counterproductive.
• You can ask for an advance payment directly from workers’ comp
Michigan law already has a procedure for seeking a loan from the insurance company. A disabled employee who is currently receiving wage loss benefits can seek an advance lump sum payment. The insurance company is allowed a maximum of 10% interest per year. Future wage loss benefits will be reduced until the advance is paid back. A magistrate can order payment of the loan if the insurance company says no.
• Settlement is usually the better option
Our clients typically settle their workers’ comp claims for a lump sum payment. This allows them to do their own medical and vocational rehabilitation without having to deal with the insurance company. Money can also be used to get medical treatment, vocational rehabilitation, start a business, pay off debt, or for retirement. Settlement provides the financial relief that many people need to get back on their feet after a workplace accident. Nothing is owed unless a person recovers money and attorney fees are limited to a percentage of what is paid.
Injured on the job and need legal help? Contact our attorneys for a free consultation!
If you were injured on the job in Michigan and have questions about lawsuit funding for you workers’ comp case, call now (855) 221-2667 or fill out our contact form for a free consultation with an experienced lawyer. There is absolutely no cost or obligation. We’re here for you.
For more than 40 years, our lawyers have been helping people like you who have suffered from on the job injuries in Michigan. We understand the physical, emotional, and psychological hardships you are experiencing from your accident. We also have the skill, experience, and know-how to protect you and get you the best possible payout amount for your case.
To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.
Remember, every work injury claim and settlement is different and must be negotiated on its own merits. Do not accept any payout amount without fully understanding your legal rights.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled employees exclusively for more than 40 years. Call (855) 221-2667 for a free consultation today.
Related information:
Can I Sue My Employer for Pain and Suffering Damages in Michigan?
