Legalized loan sharking

Legalized loan sharking

If you have a personal injury lawsuit of some kind and are desperate for money or just want your money now, there are companies out there that will give it to you, or at least part of it, right now.  And if you lose your lawsuit they won’t get a penny back from you.  Sounds great, right?  Well, it ought to be illegal.

These companies target desperate people.  You’ll typically see their ads on daytime or late night TV.  What they will do is identify people that have legal claims, then they will verify how strong the case is and based on that they’ll loan you as much money as they can get you to take and charge an insane amount of interest.  In other words, they only give you money if you are going to win your case and they get paid back way more than you’d ever imagine.

How much do they try to get?  I referred a Chicago medical malpractice lawyer a case a few years ago.  Our client became permanently disabled when a hospital gave him medication that his chart said he is allergic to.  It was a bad screw up and the hospital has no real defense.

The woman who was injured from this now had no way of supporting herself so she took out one of these loans.  They convinced her to take around $80,000.  It was more than she needed at the time to survive, but the more they give you, the more they can eventually take.  Now a couple of years later they are asking that she repay $800,000!!!

The loan company certainly helped here through a desperate time, but to me it would be insane if they got double their money in such a short period of time.  But to ask for ten times of what they loaned is ludicrous.

These loans are legalized loan sharking and need to be addressed.  States like Ohio have severely restricted them and it’s time that Illinois does the same.

If you are involved in a lawsuit I strongly discourage you from taking one of these loans.  If you must, take as little as possible and do whatever you can to negotiate the terms down.  If they won’t accept a 50% profit (which is still insane) then keep searching.  And make sure you discuss this with your lawyer and explore every other option before doing it.  It may seem like a great deal now, but it certainly won’t when it comes time to pay up. 

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