Beware borrowing on your injury case – Court rules agreement invalid and unenforceable

When Nancy Odell borrowed $3,000 while her car crash case was pending, she never expected to be in a lawsuit with the lender, “Legal Bucks,” for OVER TRIPLE THE AMOUNT BORROWED !The facts are simple.  Nancy Odell (Plaintiff) was involved in a car crash.   She got a lawyer who pursued a personal injury claim against the defendant driver. Although Plaintiff expected to recover at least thirty thousand dollars from her personal injury claim, she was having financial difficulties.  She contacted “Legal Bucks” to obtain an advance.Legal Bucks is in the business of “litigation funding.”

• Legal Bucks advances money to borrowers who are expecting to recover in pending tort claims, but who need money for personal expenses before their claims go to trial or settle.When a potential borrower approaches Defendant Legal Bucks to obtain an advance, it investigates the borrower’s legal claim to determine the merits of the case, how much the borrower is likely to recover, and, if an advance is made, the appropriate amount of the advance. The borrower then repays Legal Bucks, with interest, out of the proceeds of his or her recovery.   At the Herndon Reston area injury firm ABRAMS LANAU, Ltd., we do not

encourage clients to use these legal funding company’s for loans, as such agreements can swallow up the entire proceeds of a settlement or verdict.
   
In the Odell case, the plaintiff’s personal injury claim settled for $18,000.00. Pursuant to their Agreement, Plaintiff owed Legal Bucks $9,582.00 at the time her claim settled.  However, in a September 2nd opinion, the North Carolina Court of Appeals held Legal Bucks committed unfair and deceptive trade practices as a matter of law.  The Court wrote that Legal Bucks did not inform Plaintiff that she was executing a contract that violated the Consumer Finance Act.  The North Carolina Court of Appeals found the Agreement to be invalid and unenforceable.  Herndon Reston injury lawyer Doug Landau warns injured claimants and their families to consider other forms of financing while their claims are pending, as the interest charged by some “legal advance” companies may double or triple the amount owed and leave them with little or nothing to left at the end of the case.