Dealing with financial stress after an accident
As people struggle with debt and finance-related anxiety, it’s not surprising that Canadians once again ranked money as their most significant source of stress. The FP Canada 2021 Financial Stress Index shows 38 per cent of Canadians polled said money is their biggest stressor, even more than personal health, work or relationships.
If you have been in an accident and suffer from injuries, financial stress increases exponentially. You hope that your insurance company will take care of you, but it’s a lengthy process. Personal injury litigation can take much longer than most people appreciate, and thanks to pandemic-related closures and delays, you could be waiting years before receiving an award or settlement.
If your accident benefits are exhausted or denied, it’s another devastating blow. In these scenarios, settlement lending helps bridge the gap while your lawyer fights for a fair settlement and can be an essential tool for personal injury plaintiffs.
Talk to your lawyer
It can feel embarrassing or intimidating to discuss your financial troubles with your personal injury lawyer. Still, they need to know what you’re dealing with to get to the heart of the situation. Speaking with your lawyer at the beginning of your relationship about your options for financial support, including litigation loans, makes good sense.
There’s an understandable level of discomfort when you can’t provide basic needs for your family, but it’s crucial to keep your lawyer in the loop. If, for example, you’re skipping physiotherapy to pay rent, you could be unintentionally sabotaging your claim. An insurer’s assessment of your injuries is based almost entirely on your medical records, so that gap in treatment could devalue your claim.
Some lawyers go the extra mile and are willing to ask the right questions to understand the additional financial burdens that accident victims may be reluctant to share.
Get a complete picture of your finances
If you’re already living paycheque to paycheque — as more than 40 per cent of Canadians are — and your income is reduced, delayed or stopped due to a personal injury accident, the impact that has on your quality of life is staggering.
Of course, as you wait for your settlement or award, your bills continue to pile up. A settlement loan can help you pay for legal fees or everyday expenses — but it’s important to have a good grasp of your finances before requesting a loan.
When we talk to clients, we ask those difficult questions to figure out your basic living expenses — things like rent or mortgage payments, utilities, groceries, legal fees, and treatment — and what you need to get through this challenging time. Then, our case managers ask a series of questions about your injuries and basic living necessities and recommend a settlement loan solution that best meets your needs.
At Rhino, we offer three types of settlement loans:
Lump-Sum Loan: this option allows you to access the entire loan amount for payment at one time. There is no maximum amount, but we do encourage clients only to borrow what they need.
Facility Loan: this solution acts as a line of credit where interest only accrues on the amount advanced. We’ll approve the loan amount, allowing you to withdraw funds as needed. You may also choose to set up a monthly schedule for budgeting purposes.
Treatment Loan: this option allows you to focus on your health and wellness while we handle the administrative and economic burdens resulting from your injuries. A treatment loan acts as a line of credit where interest only accrues on the bills we pay on your behalf to support your recovery.
Consider all your financial options
Our terms and fees are transparent and straightforward — we charge interest semi-annually with a one-time administration fee. No payments are required until you receive a personal injury award or settlement. That said, any loan provided through a financial institution will come at a premium due to the compounding interest over time.
We encourage you to access loans through your network (friends, family, banks, etc.) and borrow responsibly. A settlement loan should only be considered after other options have been exhausted.
Larry Herscu is the president of The Easy Legal Group of Companies, a Private Credit Manager. Its lending solutions service the legal sector, including its clients and the service providers involved in their cases. The firm is registered to conduct business in Ontario, B.C., Alberta and the Atlantic provinces.