If you have been injured in an accident, the rest of your life doesn’t stop. Even if you are bedridden with your injuries, you will still be responsible for your own expenses – including rent, utilities, car loans, and insurance. Many people recovering from an injury cannot go back to work, robbing them of crucial income.
Between the time of your injury and a possible legal settlement, you could end up with serious financial troubles. If you cannot earn a normal salary while recovering and moving through the legal process of your case, you could end up being in debt by the time you reach a settlement.
When you have been in an accident, whether in a pure comparative fault state like California or elsewhere, your focus should be on your recovery and not on how you will pay your bills. Let’s take a look at a few ways to bridge the financial gap of a lawsuit.
Like all good Stackers, you do have an emergency fund, right? The risk you run, of course, is if it takes longer to receive your potential settlement than your emergency fund is equipped to handle.
If you’re unable to work due to sickness or injury, disability insurance kicks in to provide at least partial income replacement. Short-term and long-term disability insurance may be an employer-provided benefit; check your benefits package to find out if you’re covered – and what percentage of your salary is replaced in the event of a disability.
If you are on a limited budget, you may qualify for various forms of litigation funding. You may be able to get representation through a charitable organization, or you can investigate litigation funding. Settlement loans are similar to regular loans, with the exception that you don’t have to pay anything back once you get your settlement. In essence, the lender provides money to bridge the financial gap and expects to recoup the loan once your settlement is allocated.
Depending on the type of life insurance you hold, you may be able to access some of your policy’s equity. It’s recommended that you sit down with your insurance broker and financial advisor to see if you have any available fund access on your policy. You may be able to borrow from your available policy payout to help you finance your life during your lawsuit.
Tap Into Your Home Equity
If you own your home, you could tap into your available equity. Most mortgage lenders are open to equity loans on the amount of money you have invested in your home. If your home is paid off, you can take out a second mortgage or borrow against your equity.
You may have an available source of money sitting in your driveway or parked in your garage. If you own a car, truck, RV, or boat, you might be able to qualify for a title loan. You can have your vehicle evaluated by a secured loan lender and borrow an amount equal to its market listing. A title loan works by offering your vehicle as collateral on your loan. You can still keep and use your vehicle while making payments. The only risk is when you don’t make your payments, you could be forced to sign over your vehicle title.
If you are injured in an accident, you will likely have unexpected medical bills. Be sure to review your insurance policy to see what expenses they will cover. Some policies will help you by paying your basic bills while you cannot work or if you are waiting for a settlement payout.
Focus on Your Health and Wellbeing
If you have been in an accident, the last thing you should be worrying about is how you are going to pay your bills. Consider these strategies to replace your lost income during a lawsuit.