Legal problems, from divorce proceedings to criminal complaints and class action suits, are costly, but is it worthwhile to take out a loan to pay for them? In most cases, it’s better to find more affordable legal services to arrange a manageable payment plan before undertaking legal proceedings. Though there are some exceptions, in many cases taking a loan will only increase your troubles.
Before entering the courtroom, consider the suit and the expected payout. A loan may help you in the moment, but it’s important to look at the long term implications of borrowing money under uncertain circumstances. With many Americans already juggling multiple loans, increasing your debt load should only be done with caution.
Debt For Divorce
Getting a divorce is often a financially trying time, especially if you’re concerned about losing shared property like a home. Furthermore, since money is one of the primary issues at the center of modern divorces, any spending put towards the legal proceedings can be contentious – it’s always possible that money spent may ultimately end up belonging to your former spouse.
If you can’t pay your divorce fees out of pocket, it may be best to work with your lawyer and your spouse’s lawyer to set up some limits or prior agreements so that there aren’t additional contentions that come up at the end of your settlement.
Class Action Suits
If you’re part of a class action suit, typically there is enough money at stake that you your lawyer will work pro bono until the settlement is awarded. That’s the prime reason you shouldn’t take out a loan for such cases. But since you’ll need to document your qualification for the suit, you may have to spend a small amount on this expense.
This is currently the case with NFL players who have suffered concussions – they need to choose a doctor to document their injury before they can join the suit. You may find yourself in a similar position, but your lawyer may also be able to recommend a doctor or other professional who will provide the necessary consultations at a cut rate depending on the topic of the suit.
Personal Injury Suits
If you’re considering filing a personal injury lawsuit, you may decide you need a small loan. Don’t take one if you can avoid it, as such loans often come with extremely high interest rates – the industry is unregulated, allowing loan companies to charge as much as they want.
Instead of approaching a loan broker, talk with your lawyer about what the best approach to payment is. They’ve done this hundreds of times and know what you might expect to settle for. They may agree to work with you on a payment schedule that reflects your expected settlement and ability to pay.
Lawsuits and debt often go together, but don’t let your legal troubles sink your finances. By working collaboratively with your lawyer and doing your homework, you can approach the courtroom well prepared and come out with money still in your pocket.