As a Personal Injury Attorney, you may have clients that come to you for guidance on how to handle the mounting medical and household bills that pile up while they are out of work due to injury.
While you certainly aren’t expected to offer specific financial advice, you may be inclined to offer guidance that can help them through this tough time.
We have put together a quick list of factors to consider when helping a client find support during this difficult time, and invite you to leave a comment with additional feedback and suggestions of your own.
How urgent is the financial situation vs. how long until a Settlement Agreement is reached?
If you expect that a settlement won’t be reached for a few months or longer, and creditors are knocking down your client’s door, it may be time for them to explore alternate sources of temporary funding. Of course, this depends on the next two factors, which will help them determine the actual need for financing, if any.
However, if the debt can easily be paid off once a settlement is reached, and you expect that to happen soon, then it may be worth their patience in waiting for the final agreement.
Factor 2: What types of debt are involved?
Let’s face it: some debt can be pushed off for awhile (some loans, credit cards, medical bills, etc.), while mortgage & car payments, insurance, and other non-negotiable needs must be taken care of. If your client is not in a credit-threatening situation and is not at risk of losing the most important necessities (shelter, transportation, etc.), it may make sense for them to explain the situation to creditors and wait for a settlement to be reached.
If the client’s home, transportation, daily needs, or health care are in jeopardy, you may want to advise them to seek alternative funding for immediate expenses.
Factor 3: Are the creditors flexible?
When faced with calls from creditors and threatening letters, many people may get to a point where they can’t handle the pressure and they resort to avoidance. In order to help your clients through this difficult time, you can advise them to contact their creditors and request deferment of debt until their Settlement is reached. If creditors are flexible in terms, this would resolve the crisis.
However, if some or all of the creditors are not willing to offer flexibility or delays in repayment, your client may wish to seek out alternative sources of funding to avoid further collection actions.
The Bottom Line:
If the above factors lead you to advise your client to seek an outside funding source, there are many options available. Installment Plans, which allow a total funding amount to be distributed to the client in regularly scheduled installments, can result in substantial savings on the total cost of funding. Lump Sum Payments, which would be provided up-front to the client, can be used to immediately pay off larger debts and help the client dig out of a hole of accruing interest & late fees from overdue debts.