During a personal injury lawsuit, your focus is on being financially compensated for expenses related to your accident. But the legal process incurs many costs. It can be hard to budget, let alone cover, medical bills, rent, groceries, and other living expenses (especially if you’re out of work). Lawsuit funding can cover all of these, but how do you make the most of it? Follow these tips to manage your pre-settlement cash advance.
Don’t Use It On Case Expenses
An attorney working on a contingency fee basis pays for initial court fees, witnesses, professional testimonies, and tasks such as the recording of depositions. All case expenses are deducted from your settlement check. Still, your pre-settlement funds can last longer if you fully understand your financial situation, cut back on spending, and avoid going further into debt. Plan based on your most important expenses because you don’t know how long your case is going to take to settle.
Estimate the Total Costs of Your Personal Injury
Knowing how much you need will help get the most out of the funds you receive. Learn as much about your case as possible before applying for pre-settlement funding, including its chances of success and how long litigation might take. Other considerations include the anticipated cost of medical bills, the cost of living, and limits you can set on spending. Estimating potential costs can help mitigate financial hardships and avoid being desperate for financial assistance.
Use Your Lawsuit Funding on the Most Urgent Expenses
Don’t use your funds to pay for unnecessary expenses. Focus on covering living costs like putting food on the table. Also, use your financial support to pay for medical treatment that will enable you to recover faster. You can also pay off a car loan, cover emergency expenses, or take skills courses or advance your education to increase your future earning potential.
Consult with Your Personal Injury Attorney
A competent lawyer should know of cost measures you can pursue. They should be connected with legitimate lawsuit funding companies. Otherwise, you risk signing on with a fraudulent lender and losing money instead of being compensated for your injuries. Find a lawyer with experience in the type of law that applies to your case. They’re more likely to help get needed funding and resist pressure to settle for less than the case is worth.
Know Whether the Money Is Taxable
If the money you’ll receive from the settlement is taxable, you’ll need to put aside enough of your cash advance to cover taxes. Most monies from personal or physical injuries and emotional distress due to an injury aren’t taxable. You usually don’t pay taxes on a car accident injury settlement. However, you’ll likely pay taxes on settlements covering lost wages or punitive damages.
Determine Where to Keep the Money
If you’ve received lawsuit funding, treat it as your settlement money. The funds may be quickly deposited into your checking account but don’t let them sit there. By moving the cash to a savings account, you can earn interest on it. You may also be eligible to use a tax-advantaged account such as a Roth IRA or a health savings account. Speak to your attorney, accountant, or tax advisor about your best options.
There are also other options to consider. If your lawsuit funding isn’t tied up in covering expenses, you can help out family members or even consider investing it, depending on your specific situation and goals. But to protect your money, deposit it in a dedicated bank account, keep it separate from other forms of income, and maintain a record of everything you do with it.
Start Maximizing Your Lawsuit Funding Today
Fund Capital America has a fast and easy process to apply for lawsuit funding. It’s paperless, with no upfront fees and nothing paid out of pocket. Our term-based payback means your cash advance is backed by your future settlement. Apply today to receive same-day funding and learn more about how it works. Call 855-870-2274 and our representatives will be glad to answer your questions.
