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Do lawyers ever give their clients an advance on their settlement?

Aiken, SC |

My husband and children were in a car wreck where our vehicle was totalled. They paid us for the vehicle but my husband sustained a neck/back injury. He had to have an allignment done on his neck and back every other day for 3 months and now its finally over except for our claim for personal injury. We are having a little financial difficulty. Our water got shut off the other day, lights should be cut off any time now and we will lose our apartment by the end of the month. We struggle to feed our 2 small children and forget about christmas this year. Is it likely for our lawyer to give us a small advance in our settlement so we can get our water turned back on and our lights won't get cut off?? ($100-$150)

Attorney Answers 3

Posted

No. You've got to figure, the lawyer gets paid out of any settlement or judgment, and doesn't see those funds until the defendant pays them. So what you're asking is, do lawyers front their personal injury clients money out of their own pockets pending settlement? I've never heard of any lawyer that personally gives advances on settlements to his or her clients. What if the client loses? Then the lawyer is out not only for his time (no fee in contingency cases if client does not win) but his own personal money as well.

What you're describing is basically a loan to the client, which is a business transaction, and there are ethical rules forbidding lawyers from entering into business transactions with their clients.

Not legal advice as I don't practice law in South Carolina. It's just my two cents on the facts you describe in light of general principles of law and legal practice. If you need legal advice, please consult a lawyer who holds South Carolina licensure. That's not me.

Good luck.

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Posted

Attorneys are barred by ethical rules from giving advances on settlements. However, some do give small advances nontheless. Thre are alos companies that loan money in return for a lien on PI Settlements. I discourage my clients from getting these, but they can be helpful in and emergency.

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Posted

It is improper and unethical for an attorney to give an advance other than to pay for the costs of certain expenses in a client's case. However, there are many attorneys who can direct you to entities which are willing to lend money to you in exchange for an assignment of a portion of the proceeds of your injury settlement. These loans usually have very high interest rates which can eat significantly into your settlement proceeds if the settlement becomes drawn out or protracted or a lawsuit becomes necessary to resolve the case.

Only seek these types of loans as a last resort in a sever financial crisis.

DISCLAIMER – LEGAL ADVICE If you found this answer helpful, let me know by clicking the Thumbs-Up tab at the bottom. You may mark this as a Best Answer for the time I spent crafting this and thinking about your matter. My comments are not intended to establish an attorney-client relationship, are not confidential, and are not intended to constitute legal advice. Proper legal advice can only be given by an attorney who agrees to represent you, who reviews the facts of your specific case, who does not have a conflict of interest preventing the representation, and who is licensed to practice in the appropriate jurisdiction where the legal issue may be filed or in the state where the law applies.

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