That is absolutely true. Attorneys are forbidden by Board rules to do anything to cause a lien on your case which will happen with such a loan. If you have reached an agreement to settle your claim it is possible that the insurance company would agree to advance part of your settlement.
He/She is telling you the truth. State Board Rules will not allow lawyers to assist with loans against WC cases.
You could ask him/her if the insurer will agree to an advance on your case or your settlement.
Your attorney cannot lend you money but there is no impropriety in you borrowing money from a lender such as the ones you mention.
These should be a last resort due to the high interest rates but if you must choose between foreclosure on your home or repossession of a vehicle and paying the interest, you should probably pay the interest. Just borrow as little as possible.
If this information has been helpful, please indicate by providing feedback that the answer was either "helpful" or "best answer" as appropriate. Legal Disclaimer: Mr. Candiano is licensed to practice law in Illinois and Indiana. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question.
Your lawyer is telling you the truth. The law doesn't allow these loans and the interest they would charge you is outrageous anyway. You might ask your lawyer if the insurance company can send you an advance on your settlement. You can even volunteer to have the overnight mailing deducted from your settlement so you can get it ASAP. Good luck!
Your lawyer is telling you the truth. Board Rule 84 states: "No party to a claim or any party's attorney shall assist, secure, create, or execute any loan or assignment with a third party creditor which requires repayment out of any recovery, settlement, or payment of benefits from any claim filed under this chapter." This rule is directed at companies like Oasis and Peachtree.
See Board Rule 84:
"No party to a claim or any party’s attorney shall assist, secure, create, or
execute any loan or assignm
ent with a third party creditor which requires
repayment out of any recovery, settlement, or payment of benefits from any claim
filed under this chapter."
I agree that the Board Rule seems to disallow these types of loan, but I do not think the Board has the power to regulate a contractual agreement between a claimant and an outside 3rd party. I also don't believe that the SBWC can regulate this type of conduct by attorneys. The Supreme Court of GA can regulate the conduct of attorneys but I am not sure this rule is within the power of the SBWC. I don't think this rule has been challenged before and I know of no one who has been sanctioned for doing this type of loan. I think the Board would refuse to approve a STIP with the loan mentioned in the STIP, but if the loan company understands that their loan is not guaranteed by the Board I think the loan can be done outside the STIP. Further, who would be the complaining party to bring the loan to the Board's attention such to have the Board wield its "power" under the rule? The Claimant is obviously not going to do that since they asked for the loan. The loan company is not going to, so I fail to see where this issue will ever come before the Board if it is not in the STIP. Lastly, does the rule even have any teeth? I don't see where the Board can do anything if the rule is violated, other than again fail to approve a STIP.
Just my thoughts. I would rather my client be able to eat than allow the Insurer to starve them out and force them to give up a legitimate claim for pennies on the dollar. At some point, we have to stand up for what is right. Some of the loan companies out there have exorbitant interest rates, but some have rates lower than what your average credit card carries. You have to look around.