According to the Bureau of Labor Statistics, employers reported 2.1 million injury cases in 2020. Workers’ compensation is available to any employee who gets injured on the job. But applicants often don’t get the payments they’re entitled to because employers usually deny responsibility for an injury or claim it didn’t occur on the job. This leaves claimants with little option but to file a lawsuit, which can drag out for months or years before settling. However, loans against workers comp settlements can get you the money you’re entitled to much faster.
What is a Settlement Loan, and How Does it Work?
A settlement loan is different from a traditional loan. It’s essentially a cash advance on your future workers’ comp settlement or the benefits you’ll eventually receive. Often referred to as settlement or pre-settlement funding, it can apply to workers’ comp and many other types of lawsuits. The loan is non-recourse, meaning you only have to repay it if your case is successful. There’s no financial risk to you if the case loses.
If you’ve filed a workers’ comp claim, you can apply for a settlement loan with a lending company. The amount offered depends on the value of your case, the benefits owed, and the scope and nature of your injuries. Most lenders will offer you between 10% to 20% of your estimated settlement. Once you receive a settlement or benefits, you owe the loan amount plus interest to the lender. In the interim, you’ll have the cash to cover medical bills, emergency expenses, rent, mortgage payments, groceries, and family obligations.
Why Would Someone Need a Workers’ Comp Settlement Loan?
Workers’ comp settlements can take extended periods of time to receive. During this time, you will likely have medical bills, home expenses, and costs that pile up. If your injury is serious, you won’t be able to work, resulting in a lack of income. A workers’ comp settlement loan is useful during this time as it relieves the burden of your expenses until you receive your settlement.
How a Workers’ Comp Claim Differs From a Personal Injury Claim
Plaintiffs injured due to someone else’s actions or negligence often file a personal injury claim, enabling them to sue for the full amount of their losses. California state law does not put a cap on compensation. You can even seek monetary damages for emotional distress, and in some cases, punitive damages apply if an employer engaged in misconduct that contributed to your injury.
Most personal injury claim plaintiffs are independent contractors. However, if you’re a full-time employee at a company with workers’ comp insurance (the law requires most employers have it), you can file a claim with the state’s workers’ compensation system. The insurance will cover lost wages, medical treatment, and possibly other damages if approved.
Who Qualifies for a Workers’ Comp Settlement Loan?
Any individual who has filed a workers’ compensation claim with a pending settlement can apply for a pre-settlement loan. Depending on the lender, the approved loan qualifications will vary. However, most require you to have a pending workers’ compensation claim due to a valid work-related injury or illness, legal representation for your case, and a high likelihood of settlement. The stronger your case is, the more likely you will qualify for a workers’ comp settlement loan.
How to Apply for Loans Against Workers’ Comp Settlements
Since most workers’ compensation claims lead to lengthy litigation, you need a more immediate financial solution. In the long run, resorting to bank loans and credit cards can be more costly than a pre-settlement loan. While workers’ comp applicants may face hardships, applying for a settlement loan is easy. To apply for a loan, you’ll need to do the following:
- Retain a Workers’ Comp attorney: A skilled attorney knows how to navigate the legal process, so the odds of your claim being successful are much higher. Don’t try to seek workers’ compensation alone — hiring an attorney opens the door to eligibility for settlement funding, as the lender must confer with your lawyer about the facts of your case.
- Find a reputable lender: Research lending companies and ask your lawyer for recommendations. When evaluating companies, compare their payment terms, interest rates, fees, and fine print. Once you find a lender, fill out an online application form, which takes just minutes. They’ll need your name, basic details on your case, and your lawyer’s name and phone number.
- Accept the agreement: Read the entire contract and make sure you understand the terms before signing it. Have your attorney review the agreement as well. Once approved, funds can be available within 24 hours. Regardless of what the lender offers, you can choose to take less based on your expenses.
Apply for a Workers’ Comp Settlement Loan with Fund Capital America
At Fund Capital America, we provide cash advances to victims seeking loans against workers’ comp settlements and other claims. Our options include pre-settlement funding, post-settlement funding, a cash advance refinancing program, and a settlement acceleration program for workman comp loans in California.
Apply online today and request payouts in a lump sum, as monthly installments, or multiple advances throughout your case. Call 855-870-2274 to learn more about how our team can help fund your case in Los Angeles and surrounding areas.
Frequently Asked Questions
Can I collect workers’ comp if I work from home?
Yes, you can collect workers’ compensation even if you work from home. Remote workers are entitled to workers’ comp if they incur an injury from work-related activities, performed during regular working hours. However, it can be harder to prove that the injury was work related if you work from home.
Are there any risks or drawbacks to taking out a loan against my workers’ comp settlement?
There are some risks associated with taking a loan against your workers’ comp settlement. Many lenders charge high interest rates, which will diminish the total settlement amount you receive. If you’re the recipient of a smaller settlement than predicted, you still have to pay back the full loan amount, and are left with less money than expected.
What are the tax implications of taking out a loan against my workers’ comp settlement?
There are no tax implications for loans while on workers’ comp in California. However, it’s important to double check with a tax professional before taking out a loan. You can also contact our team with any questions.
