Home » HomeFamily Articles » Plaintiff Loan Industry: Viable Companies or Loan Sharks?
Plaintiff Loan Industry: Viable Companies or Loan Sharks?
A growing industry loans out money to lawsuit plaintiffs, but is taking the money a good idea?
July 09, 2011 /HomeFamily PR News/ -- Imagine for a moment that you have been injured in a car crash because an electrical system connected to the engine of your vehicle failed. Due to the crash, you are unable to work and are temporarily or permanently disabled. You decide to hire an experienced personal injury attorney and sue the automobile company, but will be out of work during the proceedings. How will you pay your bills during the litigation?
This is where plaintiff loan companies step in. Plaintiff loan companies, which operate in all 50 states, provide financial assistance to plaintiffs involved in personal injury lawsuits. The companies pay all living expenses for the plaintiff for the duration of the lawsuit. The companies claim that this money is not a loan but simply an investment in the plaintiff, because if the plaintiff loses his or her lawsuit, he or she owes nothing to the plaintiff loan company. However, if the plaintiff wins, he or she must use the award to pay back all of the "investments", with interest rates as high as 250% of the initial loan amount.
The plaintiff loan industry has been growing for a couple of decades, and now many companies are lobbying state legislators for laws that will exempt them from current consumer borrowing laws, and for legislators to develop a unique set of standards for the plaintiff loan industry. Among the proposed regulation is an exemption from existing interest rate caps and other laws that protect borrowers.
These lobbying efforts have met their fair share of opposition. Chambers of commerce, insurance companies, and other opponents believe that the proposed regulations would "embolden" plaintiffs in litigation and threaten the protections afforded to borrowers in other contexts. It is also undetermined if these plaintiff loan companies are actually legal, and some legal scholars believe that adding a third-party interest to personal injury lawsuits is not wise and may not be ethical. Most importantly, vulnerable injured plaintiffs should have their borrower rights protected just as they would be if they were borrowing funds under more favorable circumstances.
The legality of plaintiff loan companies and the regulation of the industry will be determined on some level in the coming months. Until these issues are resolved, however, buyers better beware.
Article provided by Thomas Q. Keefe, Jr., P.C.
Visit us at http://www.tqkeefe.com/
---
Press release service and press release distribution provided by http://www.24-7pressrelease.com |
|
|
Press Release Contact Information:
Findlaw PR
|
|
|
|
|
| HOMEFAMILY ARCHIVE SEARCH |
|
|
| |
|
|
Advertise With Us |
About Us |
Contact Us