The time needed to reach a personal injury settlement agreement and receive the award varies from case to case. Settlements can take months, even years, to negotiate. Such delays could affect your ability to pay injury-related medical bills and keep on top of household expenses, such as a mortgage, utilities, or even groceries.
However, there are a number of financial options that can help you stay afloat while you’re waiting for your settlement award. Every case is different so it’s advisable to seek an attorney to guide you through the full range of options, but we’ll discuss a few of them here.
Delaying payment of medical bills: letters of protection
A letter of protection is simply a contract between you, your lawyer, and your medical care provider stating the provider will delay repayment until you receive your personal injury settlement award. Upon receipt, your lawyer will make payments to your provider directly.
This is a great option for those with mounting medical debt and insufficient funds to cover treatment. It is important to consider, however, that a letter of protection DOES NOT free you from medical debt if you lose your personal injury suit. Neither does it obligate your attorney to repay those debts. Very few medical providers will accept such an option.
Personal injury resulting in permanent or long-term disability: applying for disability insurance
If your injuries have orare expected to prevent you from seeking gainful employment, broadly defined as consistent work and income, you may be eligible for federal or state disability insurance.
There are two forms of disability insurance: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI is a work-based program, meaning eligibility is assessed using prior work history and if you had sufficient income to contribute to the fund. Because of this, upon receiving a personal injury settlement, your SSDI benefits should not be affected.
SSI benefits, on the other hand, are needs-based and support low-income individuals. Because SSI is need-based, upon receiving a personal injury settlement, your benefits might be reduced or discontinued.
Collecting from your own medical or auto insurance companies
Of course, collecting from your own insurance company is always an option. Just remember that they do not have your best interests in mind. Their ultimate goal is to save the insurance company money by paying out as little as possible. However, initially dealing with your own insurance company may get you the financial resources to pay your expenses sooner rather than later. The insurance companies will want to be reimbursed at the end of the case from your settlement.
A last resort option: settlement loans
Settlement loans are cash advances of a portion of your expected settlement award while your case is pending. If you lose, you are not obligated to pay the settlement funding company back.
HOWEVER, settlement loans are expensive! Interest rates range from 27% to 60% per year, meaning you might owe double or triple of the original amount. While this could be a measure for desperate times, you might be risking your full settlement amount.
As you can see, you have options to avoid crushing injury-related debts. If you’d like to learn more about your options, contact our seasoned personal injury attorneys anytime, day or night, at (805) 628-4967for a free consultation. We also work on a contingency fee basis, meaning we collect nothing unless you win.