Video Transcript
Hey, it’s Bernard Nomberg with the Nomberg Law Firm. I have another area of the law that affects our business and practice every day with our clients that I wanted to take a few minutes to talk about. And that is when clients consider taking out loans with these companies that will offer money against any settlements or against any claims that the client may have, due to injuries.
These loans are dangerous. We do not condone the use of these loans. There are many reasons why that I’ll get to in a minute.
But it really creates more stress than the problems that they offer to solve.
A real case example is when we have a worker who’s injured and is in the middle of a workers’ compensation claim and they have reached maximum medical improvement and by operation of law, and Alabama work compact, their weekly compensation checks stop.
But it will now be a matter of weeks or months before we can get the claim into a posture where it can be settled and resolved and paid out to the client.
So during these two or three weeks, or even months, what is the client supposed to do to pay bills?
Well, that’s when the clients typically try to consider these predatory loans and when I say predatory, it’s because if you read the fine print, those contracts that you sign – the client signs for a loan over a couple thousand dollars or it could be much more than that – the interest rates are just ridiculous. They’re astronomical. Sometimes, they’re compounding.
And at the end of the situation where the client has received the money and spent it on bills and paid for food or whatever it may have been – and they truly needed the money at the time – it creates a huge communication problem, expectations problem, for the client when dealing with us, the attorneys, in trying to get the case settled.
Because that’s another factor that we have to deal with. Because now the client has to not only pay whatever regular bills that they’re normally used to paying, but now they also have to pay back – by contract that they signed – these loans.
So a $2,000 loan could turn out to be a $3,000 or $4,000 payback.
There are many of these companies that advertise on the Internet that may even contact the injured folks directly. Somehow, they get their name, number, etc., or they may see them on TV.
It is our practice at our firm to always advise our clients against the use of these predatory loans and these loan companies.
I don’t have any great answers where the client is supposed to get their money to pay the bills in the interim. Hopefully, there’s some savings. Hopefully, there are some loved ones.
There’s really no great answer here, but we do our best—once the client reaches maximum improvement, we know that their checks have been cut off—to try to put the case in the best posture we can to get it resolved.
If you have any questions or concerns or if this is an issue for you, please give us a call here at the Nomberg Law Firm (205) 930-6900. We can also be found at NombergLaw.com and we have a Twitter/X feed as well as Facebook. Thanks.
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Once a client reaches maximum medical improvement, by operation of Alabama law, the weekly checks will stop. During the interim, before we can get the client’s claim settled and paid, clients sometime look to take out a loan to pay the bills. This is not a good idea by any means because Alabama law states that these loans are most likely illegal. Please consider getting a loan from some other source. It is very important to know that once you sign the contract for the loan even if your case does not result in a settlement where you get money, you will still have to repay that loan plus the interest!
If you have any questions or concerns about this issue or other issues on the law, please call the Nomberg Law Firm at 205-930-6900. Our website is www.nomberglaw.com.