3 Things to Know About Protecting Your Credit Score After a Car Accident Case

17 January 2017
 Categories: Law, Articles

Getting in a car accident can change your life forever and seeking compensation for your injuries and damages is something you can and should do if you were not at fault for the accident. Settling a case like this can take some time, though, and one of the bad parts about this is that it can rob you of your good credit score. Here are a few things to understand about personal injury cases and credit.

Reasons Your Credit Might Suffer

The car accident you were in will not directly affect your credit in any way, but the medical bills you incur can. This can happen if you are not able to pay your medical bills out of your pocket while your case is being settled. If you begin racking up medical bills that you cannot pay, the medical providers might report these debts as unpaid debts on your credit report. If you had great credit, these reports could cause your score to drop significantly.

Ways to Prevent This From Happening

If your credit is really important to you, there are some options you could consider that may help you protect it during this time. The first option is to use your health insurance to pay the bills. If you do this, you would not have to worry about having unpaid debts, and you could possibly recover this money through your lawsuit when it is complete.

A second option is to have your personal injury attorney talk to all your medical providers. By doing this, the attorney might be able to encourage them to agree to a Letter of Protection. This letter prevents a healthcare provider from trying to collect a debt from you during your case. In exchange, the lawyer will usually offer a lien to the healthcare provider. This lien entitles the provider to a certain amount of money from the proceeds of the lawsuit. This option can work well for many cases, and it will help you protect your credit.

A second option you could look into is a lawsuit settlement loan. This type of loan is issued by lawsuit settlement funding companies, and getting a loan like this is not hard to do. To qualify, you must be in the middle of a lawsuit and you must have a great chance of winning the case. If you meet these requirements, you could have cash in your hands very quickly. When your case eventually settles, you will receive a lower amount of compensation from the case, simply because the lawsuit loan would have to be paid out of the proceeds. The benefit of this option is that you could use the proceeds to pay your debts, and this would prevent the debts from damaging your credit.

Suing for Bad Credit

There is another option you could look into, which involves suing for bad credit. If your credit was great and the car accident caused it to drop significantly, you might be able to recover some compensation for this.

In a personal injury case, you are allowed to seek compensation for many things, including pain and suffering. In a sense, losing a great credit score could be viewed as a painful experience. This can be especially true if you had been working on your credit score for the last few years. All your work could easily be ruined if you end up with unpaid medical bills on your credit report.

Having good credit is important for so many reasons, and you do not have to let your accident ruin yours. If you would like to learn more about this, contact a firm such as Dunnigan & Messier P.C.