Pre-Settlement Legal Funding Benefits the Injured To Get More Settlement Money in Their Personal Injury Case

Personal injury accidents create a lot of problems beyond just the physical damage that you can see on the automobile that was involved in the accident. If you or a loved one have ever been seriously injured in a car crash or other type of personal injury accident, you understand the toll and hardship this can have on you, your family, and your friends. As a result of a personal injury, you may be dealing with both physical injuries and emotional anguish. To make matters worse, your injuries may be preventing you from working and leave you in a bind financially and at risk of permanently losing your job.

It isn’t fair to be dealing with physical, emotional, and financial challenges as a result of an accident that wasn’t your fault. Although it isn’t fair, unfortunately, this is the situation too many victims find themselves in.

If this is the situation you find yourself in, your first step should be to hire the best personal injury lawyer possible and see if you qualify to file a lawsuit against the person(s) or company that should be held financially responsible for your injuries. Fortunately, most personal injury law firms do not charge you for a consultation, and if they decide to take on your case, they typically will only charge you if they win a financial settlement for your case.

The Key to Your Financial Freedom

Getting a lawyer or legal firm to represent you as part of your personal injury lawsuit is key because it lets the insurance companies know you are serious about getting the compensation you deserve. Insurance companies will do their best to pay out as little as possible in the event of a claim, regardless of the severity or the extent of the damage. Hiring a personal injury attorney allows you to have someone advocating on your behalf, provide you with advice about your best treatment options, as well as help you get the response you need from an unresponsive insurance company.

Additionally, hiring an attorney to represent you in your personal injury accident claim opens the door for you to be eligible for pre-settlement funding. In order to qualify to receive an advance against your future settlement, most pre-settlement funding companies require you to have active representation by a personal injury law firm.

What is Pre-Settlement Funding?

Pre-settlement funding provides a plaintiff or injury victim with an advance against their future settlement. Unfortunately, insurance companies representing the at-fault parties in an accident typically will look after their financial interest first, rather than seeking to help the injured victim. As a result, getting a settlement can be a tedious and lengthy process leaving you responsible for managing the financial impacts of the accident on your own. This is where pre-settlement funding can be a tremendous asset and help.

In pre-settlement funding, the only item of benefit is the value of your pending personal injury lawsuit. As a result, pre-settlement funding companies do not require background checks, credit checks or any proof of ongoing income. This is a tremendous benefit considering being able to provide assets as collateral or a stable financial background can be a major stumbling block for many individuals seeking traditional bank financing.

It is important to know that pre-settlement funding is non-recourse, meaning you only have to repay the money advanced against your lawsuit if your attorney successfully wins your lawsuit. Additionally, when you win your case, your attorney handles paying back the funding provider out of your settlement, so you don’t have to worry about making the payment back to the funding company. If approved for funding, the process is very quick, and most pre-settlement funding companies will provide you with money within 24 to 48 hours.

More Time Means More Money

Pre-settlement legal funding provides you and your lawyer additional benefits outside of providing the money you need to pay your bills. As previously mentioned, insurance companies are often not looking out for your best interest. Not to mention, one of the many tactics at-fault insurance companies will try is to stall settling the case for as long as possible in hopes of the claimant taking a lower settlement amount to just get the case resolved and cash in their pocket. When personal injury victims are unable to withstand the financial pressures of an insurance company, clients are forced to settle prematurely and for less money than they deserve.

Getting pre-settlement funding provides financial relief for plaintiffs while giving their attorneys more time to work their case, ultimately increasing the payout amount. Data from the National Center for State Courts and the United States Department of Justice shows that most personal injury cases are resolved within 1-3 years. You may be able to make it financially for 12 months, but if forced to wait 24 -36 months for a settlement, depending on your situation, it could be unbearable.

The Benefits Are Clear

The benefits of pre-settlement legal funding for you as the victim and your lawyer are very clear. Pre-settlement legal funding provides the money you need right now to cover your ongoing expenses and provides your attorney the additional time they need to work your case, do the proper investigation, negotiate with the insurance company, or even possibly take your case to trial in order to maximize your payout amount, so you get the most money possible. Insurance companies frequently utilize financial pressures to get you to accept a settlement that is less than the case’s true value. Pre-settlement legal funding provides instant relief to your financial strains, allowing you and your attorney the proper amount of time needed to either continue negotiating with the insurance company or proceed to trial and get the highest payout amount for you.

Charles Price, CEO of Capital Now Funding

The State of Georgia is calling out Allstate for raising rates 40% and dragging out claims.

Allstate is under fire from Georgia regulators for using a loophole in Georgia law allowing them to raise insurance rates 40%. Not only is Allstate raising their rates, but they are also dragging out claims for years.

Check out the story for yourself. Allstate is taking advantage of insurance loophole, Georgia Insurance Commissioner says

This story illustrates why there is a need for Consumer Legal Funding. Consumer Legal Funding allows consumers to get the settlement that they deserve and not the one that the Insurance Industry wants consumers to get.  

Why Consumer Legal Funding is Needed Today More Than Ever

The opponents of consumer legal funding often say that consumers do not need this product. That they have several other options which they can tap into, and as such, are trying to put up barriers through the legislative process in limiting consumers’ ability to have access to this vital piece of financial stability.

What is interesting is that the barriers that are being put up are designed so that consumers will not have access to this product at a time when they need it most. There are pieces of legislation being introduced across the country that would fully ban the product. Other pieces of legislation would make it cost-prohibitive for companies to offer the product, thereby banning the product and not making it available to those who need it most.

A recent CNBC.com report it found the following:

  • 20% of American workers run out of money between checks
  • 68% do not have money set aside for emergencies
  • 51% have no emergency savings at all
  • 45% financially stressed

And, thanks to inflation, the average family will need $5,200 more this year than last just to meet basic needs. This is on top of the fact that the average personal injury case takes between 1 to 3 years to settle.

So I ask again, with the need for this product greater than ever, why are the opponents of the industry being so aggressive in wanting to limit this product? It is to do one thing: force consumers to accept low-ball settlements so they can increase their bottom line.

U.S. Supreme Court Justice Lewis Powell, Jr. once said, “Equal justice under law…it is perhaps the most inspiring ideal of our society. It is one of the ends for which our entire legal system exists…it is fundamental that justice should be the same, in substance and availability, without regard to economic status.”

Consumer legal funding gives consumers the ability to receive “Equal justice under law,” and get a fair and just settlement, as opposed to one that is forced upon them because of their financial circumstances.

What does “Social Inflation” and “The Man Who Shot Liberty Valance” have in common?

In the movie with John Wayne and James Stewart there is a famous line at the end of the movie, “When the legend becomes fact, print the legend

In other words when fiction becomes fact, print the fiction. That is what is happening with the insurance industry when they are talking about Consumer Legal Funding and Social Inflation.

In a recent paper titled: Social Inflation: What it is and why it matters it references  “litigation lending” as a cause for why there are increase to consumers for the cost of insurance. But the document that they are referencing is over a decade old that was written based upon information that was gathered on the internet three years before that. Not a single consumer legal funding company was directly contacted for the paper. All the data that was referenced was taken off websites. The information was not verified by outside sources. As we all know, information published on the internet is ALWAYS factual and TRUE

What they are saying is that the reason consumers are paying more for insurance is because of consumers getting financial help because the insurance industry is taking so long to settle the legal claim. So, let me get this right, the industry that is causing the problem, is blaming those who are solving the problem? This is like blaming your doctor because you fell and broke your arm.

In fact, the Consumer Federation of American published on the topic. The conclusion of the paper: How the Cash-Rich Insurance Industry Fakes Crises and Invents Social Inflation, states:

For five decades, businesses and consumers have been victims of periodic eruptions in insurance premiums caused by the property/casualty insurance industry’s economic cycle, the industry’s unique accounting methods, and laws that allow anti-competitive pricing by this industry. While insurers try to convince the public that lawsuits and juries, or “social inflation,” are to blame for this, historical data are clear that this has never been true – and it is not true today. The only way to stop volcanic eruptions in insurance premiums is through better oversight and regulation of the industry’s mismanaged accounting and the cyclical nature of the insurance business.

So, I guess the Insurance folks want you to live by the words of “The Man Who Shot Liberty Valance”, “When the legend becomes fact, print the legend”. They believe that eventually people will believe it is true if they say it with such authority and gusto. Remember what Elvis Presley once said, “Truth is like the sun. You can shut it out for a time, but it ain’t goin’ away.”

Illinois Governor signed SB 1099 The Consumer Legal Funding Act into law.

Illinois becomes the latest State to bring proper regulation to the Consumer Legal Funding industry with the signing of SB 1099.

The Alliance for Responsible Consumer Legal Funding, a major Trade Association for the companies that offer Consumer Legal Funding, were proud to work with Illinois Senator Jackie Collins and Representative Curtis Tarver in the drafting and passage of this bill.  Additional sponsorship was offered by Senators John Collins, Mike Simmons, Mattie Hunter, and Ann Gillespie along with Representatives Elizabeth Hernandez and Jay Hoffman.

The legislation was also supported by the Woodstock Institute, the leading consumer advocate organization in Illinois.

SB 1099 brings some of the strongest consumer protections in the country involving Consumer Legal Funding.

It prohibits companies from:

  • Paying or offering a commission or referral fee
    • Accept a commission or referral fee
    • Make false or misleading statements in advertising
    • Make any decision in the consumers legal claim
    • Knowingly pay or offer to pay court costs, filing fees or attorney fees
    • Provide legal advice to the consumer regarding the funding or underlying legal claim
    • Attorneys who represent the consumer are prohibited from having a financial interest in the funding company

It also mandates that companies that will offer this product must be registered with the Illinois Department of Financial and Professional Regulations and pass a background check and post a surety bond.

Illinois will be the first state that will require companies that offer Consumer Legal Funding to Illinois residents that they must make them aware of Financial Counseling programs.

“I would personally like to thank Senator Collins and Representative Tarver for their dedicated efforts in getting this important piece of legislation passed.” stated Eric Schuller, President of Alliance for Responsible Consumer Legal Funding, They were not swayed by the opponents of the legislation and ensured that this product can be offered to the consumers of Illinois in a fair and responsible manner.”

Illinois joins Maine, Ohio, Nebraska, Oklahoma, Indiana, Vermont, Tennessee, Nevada and Utah in bringing proper regulation to the industry.

Brian Garelli the President of Preferred Capital Funding said: “I would like to thank Governor Pritzker and the Illinois legislature for making SB 1099 law in Illinois. The bill added over a dozen consumer protections.  It also balances the playing field between multibillion dollar insurance companies and injury victims that might not otherwise be able to wait for a fair settlement while their case winds its way through the court system.” The law goes into effect immediately

Vote no on NY A1270-A

A1270-A will eliminate Consumer Legal Funding from the State of New York

A1270-A eliminates this key, and much needed, financial assistance from the consumer of New York. It makes it cost prohibitive for the companies offer it to the much-needed consumers of New York.

Consumer Legal Funding allows New York consumers to get the fair, and just value of their legal claim. It gives them the ability to put food on the table and keep, or sometimes, put a roof over their head while their legal claim makes it way through the legal system.

Here is why it is needed more today than ever:

  • According to a poll reported by CNBC.com (4/5/2022)
    • 20% of American workers run out of money between checks
    • 68% do not have money set aside for emergencies
    • 51% have no emergency savings at all
    • 45% financially stressed
    • 83% of those with financial stress experience anxiety/56% depression
    • 33% have been declined for credit in the past 12 months/47% of Black workers
  • On average it takes between 1 to 3 years to settle a personal injury case.
  • And, thanks to inflation, the average family will need $5,200 more this year than last just to meet the basic needs.

The driving force behind A1270-A are those who do not want consumers to get a fair shake, who do not want justice for those who have been wronged or harmed, like Derrick Hamilton who was wrongly imprisoned and used Consume Legal Funding to put a roof over his head and survive while his case made its way the long legal system. It was because of Consumer Legal Funding he was able to get the justice he deserved.

Opponents to the industry, and the consumers of New York, are trying to classify this product as a loan and cap the rates as such. Multiple courts in New York have stated with authority that Consumer Legal Funding is not a loan. This is a financial tool that allows people like Ilias from Corona who said, “I felt like I was drowning and now I can breathe”.  Or Joanne from Jamaica who needed the money to pay her bills, due to her husband passing.

By passing A1270-A you will be rewarding those who want to increase their profits on the backs of consumers who are just trying to get their day in court.

Remember the words that are engraved above the entrance to the US Supreme Court, “Equal Justice Under Law”

Consumer Legal Funding allows consumers to get the financial resources they need while their claim makes its way through the legal system and get the equal justice that they deserve.

Tell the New York State Assembly to stop listening to special interest groups, like the Insurance Industry, that want to eliminate this product and harm the consumers of New York and start to  listen to those who have benefited from the product and made a better life for themselves.

Why Consumer Legal Funding is Needed Today More Than Ever

The opponents of consumer legal funding often say that consumers do not need this product. That they have several other options which they can tap into, and as such, are trying to put up barriers through the legislative process in limiting consumers’ ability to have access to this vital piece of financial stability.

What is interesting is that the barriers that are being put up are designed so that consumers will not have access to this product at a time when they need it most. There are pieces of legislation being introduced across the country that would fully ban the product. Other pieces of legislation would make it cost-prohibitive for companies to offer the product, thereby banning the product and not making it available to those who need it most.

A recent CNBC.com report it found the following:

  • 20% of American workers run out of money between checks
    • 68% do not have money set aside for emergencies
    • 51% have no emergency savings at all
    • 45% financially stressed
    • 83% of those with financial stress experience anxiety/56% depression
    • 33% have been declined for credit in the past 12 months/47% of Black workers

And, thanks to inflation, the average family will need $5,200 more this year than last just to meet basic needs. This is on top of the fact that the average personal injury case takes between 1 to 3 years to settle.

So I ask again, with the need for this product greater than ever, why are the opponents of the industry being so aggressive in wanting to limit this product? It is to do one thing: force consumers to accept low-ball settlements so they can increase their bottom line.

U.S. Supreme Court Justice Lewis Powell, Jr. once said, “Equal justice under law…it is perhaps the most inspiring ideal of our society. It is one of the ends for which our entire legal system exists…it is fundamental that justice should be the same, in substance and availability, without regard to economic status.”

Consumer legal funding gives consumers the ability to receive “Equal justice under law,” and get a fair and just settlement, as opposed to one that is forced upon them because of their financial circumstances.

Consumer Legal Funding for Plaintiffs AND MONEY MANAGEMENT Podcast

Consumer Legal Funding for Plaintiffs AND MONEY MANAGEMENT

On this episode of Cut to the Chase:, we bring back Eric Schuller from Alliance for Responsible Consumer Legal Funding (ARC) and Tara Alderete from Money Management International (MMI)I to go over some potential financial assistant for Plaintiffs who have a viable case and need some money to get them through tight times that their injury has caused or contributed.  MMI is one of the largest and longest-serving financial counseling agencies in the country.    On this show, Eric and Tara discuss the collaboration between ARC and MMI to provide litigants with loans AND financial planning, including the exciting new website to enable these litigants with valuable resources.http://www.arcfinanciallyfit.com/

Click here to listen to the podcast https://gregggoldfarb.libsyn.com/litigation-funding-for-plaintiffs-and-money-management

Alliance for Responsible Consumer Legal Funding (ARC) Teams Up with Money Management International (MMI) to Offer Customers Access to Financial Resource Site

ARCFinanciallyFit.com relaunches financial wellness resources to bridge the emergency savings gap

Washington, DC – February 21, 2021 – The leading trade association for the consumer legal funding industry, Alliance for Responsible Consumer Legal Funding (ARC), a nonprofit organization, announces the relaunch ARCFinanciallyFit.com (Financially Fit), a website providing consumers with tools to achieve financial wellness, bolster emergency savings, and better prepare for a rainy day.

ARC teamed up with the nonprofit Money Management International (MMI) to offer an easy-to-digest web platform. ARCFinanciallyFit.com presents the best expert resources to help consumers combat a financial crisis, form healthy spending habits, and prepare for the future. The site also offers free one-on-one budgeting help through partnership with MMI, one of the largest and longest-serving financial counseling agencies in the country.

“Unfortunately, most Americans are living paycheck to paycheck, and if that income stream gets interrupted, they start to spiral,” said Eric Schuller, President of ARC. “When an emergency is thrust into a consumer’s life, like a car accident or a personal injury, they usually need some help in getting through those difficult times. By providing resources like ARCFinanciallyFit.com, ARC Members can be an ally to consumers on their journey to long-term financial wellness.”

A 2021 survey by PYMTS.com found that up to 70% of millennials live paycheck to paycheck. This further illustrates a significant financial gap many Americans face in the event of an emergency situation, such as an automobile accident or sudden injury. The same study found that even a significant number (39%) of those earning over $100,000 a year are living paycheck to paycheck.

“Consumers reach out to us because they are in a bind financially and they are in need of assistance,” said Charles W. Price, CEO of Capital Now Funding, an ARC Member. “Offering our clients a resource like ARCFinanciallyFit.com enables us to continue helping clients long-term, not just for their short-term financial needs. Financially Fit is an excellent resource and one we hope consumers will utilize to help them regain their financial footing.”

“Our entire mission is to help those in need,” added Reid Zeising, Founder and CEO of Cherokee Funding, another ARC Member. “We are committed to access to care for all, and the ability for plaintiffs to meet short term financial needs while awaiting a fair settlement. When settlement does come, we believe ARCFinanciallyFit.com will provide essential nonprofit guidance and resources to our clients, and we look forward to sharing this important resource with them.”

”Regardless of age or income level, financial emergencies often lead to feelings of embarrassment and shame among impacted individuals,” said Jim Triggs, President and CEO of MMI. “Research has shown that stigma and fear of judgment prevents many consumers from taking action, but confidential and compassionate help is just a click or phone call away. Our experienced, certified, and empathetic counselors welcome ARC Member customers to lean on MMI as they navigate the financial challenges that come with life’s unexpected twists and turns.”

About ARC

The Alliance for Responsible Consumer Legal Funding (ARC) is a diverse coalition of consumer legal funding providers, consumers, academics, community activists, policy makers, and other supporters. It was established to preserve legal funding as a choice for the many Americans who have suffered an unexpected economic loss due to an accident and have a pending legal claim. Legal funding can help families pay for immediate personal needs such as rent, mortgages, car repairs, utilities, and groceries while they wait for their claims to settle fairly. ARC promotes practices and regulations that lead to informed decisions between individuals and their attorneys, so that families have more options—not fewer. ARC advocates at the state and federal levels to recommend regulations that preserve consumer choice. ARC member providers handle the majority of all legal funding transactions in the United States.

About MMI

Money Management International (MMI) is changing how America overcomes financial challenges. MMI helps create, restore, and maintain a life of financial wellness through empowered choices. For over 60 years, our clients have achieved financial confidence through nonprofit programs that educate, motivate, and liberate. MMI inspires action by delivering expert professional guidance and timely solutions aligned with our client’s goals. Experiencing a financial challenge? Find your solution 24/7 at 866.980.2227 and MoneyManagement.org.

What You Should Know About Insurance in the U.S.

What You Should Know About Insurance in the U.S.

Submitted by Gain Servicing/ Cherokee Funding

In their commercials, insurance companies are portrayed as reliable, friendly and funny. But they are hardly the characters we have come to know them by.

From Dennis Haysbert for Allstate to Brad Paisley and Peyton Manning for Nationwide, to LiMu Emu and Doug for Liberty Mutual, the talking gecko for Geico, Flo for Progressive and Jake from State Farm, insurance companies playfully try to gain consumers’ trust and attention. But the amount of money being spent on paid actors and other advertising ploys should come as a red flag, not as a source of relatability or comfort.

When it comes to actually paying out on the claims they guarantee coverage for, insurance companies are data-driven hardliners ready to holdfast during settlement talks. That’s because they have two major advantages working in their favor: Time and money.

When It All Changed

In 1994, McKinsey changed the insurance industry in the U.S., forever. In a presentation made to the board of Allstate, McKinsey said that Allstate had an obligation to its shareholders to maximize returns. From that point on, the insurance industry shifted from the benefit of policy holders to the benefit of shareholders. And as a result, Allstate’s earnings went from $240 million in 1994 to $2.4 billion ten years later. The premium dollars being paid by consumers is going directly towards growth, profit and advertising for insurance companies, all of which is to the benefit of their shareholders.

Today, insurance technology is calling the shots. “Colossus,” for example, determines claim payments based on statistics, technical data, and mathematical probabilities. It is designed to know a patient/plaintiff’s financial pain points and pay out less in settlements. Not surprisingly, the insurance industry is a leader in data science, and they know a lot about their consumers.

Big Data and Big Insurance Companies – What They Know

Insurance companies know things, like:

  • How much you make
  • What your living expenses are
  • How much in savings you have

Algorithmically, they are then able to determine where pain points exists and when to offer lesser settlement amounts. After an accident, the majority of Americans cannot wait for a settlement, nor can they afford prolonged litigation. This is because many Americans do not have enough in savings to cover their expenses if they are no longer able to work due to an injury. Insurance companies know that. They also know what cases are worth and how much to offer to entice plaintiffs to settle early for a lesser amount.

An Alternative to the Property and Casualty and Auto Insurance Business Models

As an alternative, the insurance industry should be run more like a utility, and the cosmic shift from the ‘90s needs to be reversed – and go from the benefit of shareholders back to the benefit of policyholders.

In 2020, as a result of fewer people being on the roads during the coronavirus outbreak due to social distancing guidelines and high unemployment rates, many auto insurers began giving back premiums (here is a list of which insurance companies paid back what by NerdWallet). There was so much excess profit and no claims that insurance companies essentially had to turn some of the money back over to their policyholders. But don’t be fooled, it was not out of the goodness of their hearts.

Therefore, it is so important for consumers to have access to Consumer Legal Funding, sometime called Pre-Settlement Funding.

Consumer Legal Funding allows everyday Americans to level the playing field by having the staying power they need to get the proper settlement that they deserve rather than the settlement that the insurance company thinks you deserve.