Pre and post-settlement–-don’t blow your money
The funding companies that loan you money during your lawsuit (pre-settlement loans)
can destroy any recovery you may get. Every time I have a client request one of these loans, I
cringe. Interest is high and compounded. The client does not realize that a $20,000 loan can turn
into $80,000 by the end of the case.
These litigation loans must be avoided at all costs. If you are really desperate and require
funds, there are some companies that are better than others. Seriously review and compare the
interest rates involved. Borrow the smallest amount possible and only if absolutely necessary.
The money you receive at the end of your case is usually tax free. Wasting it all on
compounded interest can be devastating financially.
The settlement funds you receive are customarily tax free. They are to be used carefully
and invested. I cannot tell you how many of my clients went out and bought an expensive car
immediately after their settlement. Do not make extravagant purchases with your settlement
funds. When I obtain a significant settlement for a client, I usually speak to them about possibly
structuring the funds, so that they get it over time. Most of my clients really appreciate the
monthly income that is generated, and in some cases they can rely on it for the rest of their lives