By Shane Smith, Shane Smith Law
One of the most common questions I get from clients is this:
“Can I get a loan on my personal injury case after a car accident?”
The answer?
Maybe. But it depends on where you live—and even then, it might not be your best move.
How These Loans Work (and Where They’re Legal)
There are companies out there called lawsuit funding or pre–settlement loan companies. They offer something called contingent financing, which is essentially a loan against your future settlement. But here’s the catch:
- In some states, these loans are enforceable—which means they get paid back directly from your settlement.
- In other states, they are not enforceable—so even if you take the money, the funding company may not be able to collect from your case.
For example:
- Georgia and South Carolina: These loans are enforceable. If you borrow money, it can be repaid from your settlement.
- North Carolina: These loans are typically not enforceable, meaning most funding companies won’t even offer loans there.
For a free legal consultation, call (980) 246-2656
Why These Loans Can Be a Bad Idea
Even if you’re in a state where you can get one of these loans, my advice is usually simple:
Don’t.
Here’s why:
These loans often come with extremely high fees and interest rates. It’s not unusual for someone to borrow $500 and have to repay $1,000 or more after all the charges are added up.
That’s a 100% return for the loan company—and a huge financial burden for you.
Better Alternatives to Consider
Before you go the lawsuit funding route, consider other ways to get help:
- Ask friends or family for a small loan.
- Talk to your landlord – some clients have been able to make agreements to delay rent payments and repay from the settlement.
- Discuss lien options with your lawyer – there may be creative legal ways to delay payment on certain bills until after your case resolves.
The key is communication. Talk to your attorney. Ask what other options might be available.
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Final Thoughts from Shane
Yes, loans on car accident cases exist. Yes, they’re legal in some states. But no, that doesn’t mean they’re a good idea.
If you’re thinking about it, please call your attorney first and talk through your options. If you have questions, our team at Shane Smith Law is always here to help.
📞 In pain? Call Shane! 980-999-9999
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