Personal Injury Settlement Loans

Many victims of personal injuries cannot afford the expenses involved in litigating for an injury settlement, even though they may have a genuine case. There are two kinds of personal injury settlement loans. The first are loans based on a collateral, and the second are non-recourse loans given by injury settlement lawsuit financing companies.

The first kind of personal injury settlement loans are forwarded by credit lending companies on some sort of collateral like property, moveable/immoveable assets or bank balance. The drawback to this method of funding is the high rate of interest, as well as a heavy financial burden on the plaintiff should he lose the personal injury settlement lawsuit.

The second kind of personal injury settlement loan is advanced by financing companies on a non recourse basis. This means that if the plaintiff wins the case, he or she will be able to repay the loan from the compensation amount won. But if the plaintiff loses, then the financing company cannot recover any money that was advanced. During the trial, the finance company bears all costs including medical bills, transportation and living expenses and lawyer's fee.

The fees for the non recourse funding tend to be high, since the financing firm is taking a risk advancing a loan that will not be returned in case the debtor loses the lawsuit. It is therefore advisable to choose a financing company carefully, and reach an understanding beforehand regarding amount to be paid, method of repayment, etc. The company may request a one time payment after a suit is won, or settle for repayment in installments. The fee structure varies.

Most financing companies hire experts who can predict the outcome of a personal injury settlement lawsuit. An unambiguous case of personal injury will be given a loan on easier terms. However, it is always a good idea to consult with your lawyer before going to any financing company.

Injury Settlements provides detailed information about injury settlements, burn injury settlements, hydrocodone injury settlements and more. Injury Settlements is affiliated with Debt Settlements.



Article Source: http://EzineArticles.com/131240Personal injury settlements are a way for you to recover lost funds, limit the suffering caused by your injury, and secure the right kind of treatment for your injuries. Most insurance providers will offer personal injury settlements immediately even if you are still getting treatment from the hospital. A personal injury settlement is actually a way out for insurance providers, but it can benefit you as well. For one, if you accept a personal injury settlement, this will mean that you want have to go to court. Cases like this often take a long time to litigate before you can achieve the final resolution.

Say you were in an accident and you sustained injuries to your face, knees, and back. You filed a personal injury complaint and fortunately, you received a settlement from your lawsuit. The settlement totaled about $50,000 but you will not get that in full. You will have to pay your lawyer his fees and your health insurance will be reimbursed for as much as $2,000. So you ask, do you still have to pay income taxes on your personal injury settlement? The answer is yes.

The complaint you filed that resulted to a settlement agreement has major tax penalties. As a matter of fact, there is a tax law called "the origin of the claim". This states that if the settlement is regarding a tax-exempt matter, as in the case of physical injury, the settlement received should therefore be tax-free. On the other hand, punitive or disciplinary damages are not exempt from tax. Punitive damages, also known as exemplary damages, are intended to discourage the behavior the defendant engaged in and punish him for that. They are not intended to compensate you.

For further and more detailed discussions of taxes on personal injury settlement --case details, tax consequences, and the like, set up a meeting with a certified and reliable tax consultant.



Article Source: http://EzineArticles.com/408741