How To Protect Your Credit When Going Through A Personal Injury Lawsuit
One of the hard parts of being involved in a personal injury lawsuit is waiting for the settlement money to arrive. These lawsuits can take months or years to settle, and you may begin racking up a lot of bills during this time that you cannot pay. This can include medical bills, household bills, credit card bills, and many other types of expenses. If you are relying on the settlement money to pay these things, you may wonder how to keep your credit good while you are waiting for the money to arrive. Here are several things you should know that may help you protect your credit during your personal injury lawsuit.
Maximize Your Own Insurance Policies
If you were physically injured and have health insurance, your lawyer might recommend filing claims for your bills with your own insurance company. This is a great way to get your medical bills paid, and paying the bills will prevent problems with collections and your credit. The downside to this is that the person who caused the injuries might be responsible to pay your medical bills. Therefore, paying your bills with your own insurance might seem unfair to you.
While this might be unfair, it does not mean the responsible party will not be responsible to repay you for the costs of your medical expenses. If you win your case, the responsible party will still have to pay you back for these bills, even if your insurance company paid them.
Ask Your Lawyer To Create Letters Of Protection
A letter of protection (LOP) is a document attorneys can use to help you protect your credit during a personal injury case, and your attorney is likely to use these letters if you are expected to win the case and receive a large settlement. An LOP is a very simple document that states that you are involved in a personal injury lawsuit. It asks the medical provider to withhold from seeking collections on the account during this time, and it promises payment to the provider when the case settles.
When medical providers receive these letters, they will typically agree to wait for the payment. This is because they understand that these types of cases take time to settle, and they are usually patient with people after they receive the letter.
Pay Your Bills With Your Own Money
If, by chance, you have enough money on hand to pay all the bills you incurred from the accident, you could go ahead and do this. This would fully protect you from having damaging information placed on your credit report, and you will get the money back if you win your case. This is the best method to use if you can; however, it's not even an option if you do not have a lot of cash.
There is another option, though, that you could consider, which is called a lawsuit settlement loan. This is a very specific type of loan you could apply for if you are certain you will be expecting a large settlement. With a loan like this, you will receive some of your settlement money now through the form of a loan. You will not have to repay this money yourself because it will be deducted directly from the settlement amount when the settlement finally arrives. A loan like this would give you a way to stay current on all your bills, and you can learn more about these loans by talking to your lawyer.
To learn more about personal injury cases and ways to protect your credit during them, contact a personal injury lawyer today.