Beyond affecting your physical health, an injury that leads to a lawsuit can disrupt your ability to work, create unexpected medical expenses, and make it difficult to keep up with everyday bills. For many plaintiffs, this financial strain begins long before a case reaches a settlement or trial.
While every case is different, certain types of personal injury lawsuits are more likely to create financial hardship because they involve serious injuries, lengthy recovery periods, disputed liability, or complex legal processes.
Why Personal Injury Lawsuits Often Create Financial Challenges
Plaintiffs in personal injury lawsuits often face financial challenges, especially when an injury affects their ability to work and a case takes time to resolve.
Lost Income Can Create Immediate Financial Pressure
For many plaintiffs in a lawsuit, lost wages due to missed work is one of the first and most difficult financial challenges.
Some injuries make it impossible to return to work right away, while others may limit a person’s ability to work full-time, perform physical duties, drive, stand for long periods, or complete other job-related tasks. Even a short period without regular income can make it difficult to stay current on household expenses.
The financial impact can be even greater for people who are self-employed, work hourly jobs, rely on tips or commissions, or do not have paid leave available.
Cases Can Take Months or Years to Resolve
Injured individuals may end up managing immediate expenses without knowing exactly when a settlement may be reached. A case may need to wait until medical treatment is complete or until doctors have a clearer understanding of the person’s long-term condition. Insurance companies may also dispute fault, question the severity of injuries, request additional documentation, or make settlement offers that do not fully account for the plaintiff’s losses.
When a lawsuit is filed, the process can become even longer due to discovery, depositions, expert evaluations, mediation, court scheduling, and possible trial preparation.
Motor Vehicle Accident Lawsuits
Motor vehicle accident lawsuits are among the most common types of personal injury cases. Car, truck, motorcycle, pedestrian, rideshare, and bicycle accidents can all lead to serious injuries, time away from work, and significant financial disruption.
Even when liability appears clear, insurance negotiations can take time. Cases involving multiple vehicles, commercial drivers, uninsured motorists, disputed fault, or severe injuries may take longer to resolve.
Serious Injuries and Recovery Costs
Auto accidents can cause injuries that require ongoing treatment, including:
- Broken bones
- Back and neck injuries
- Traumatic brain injuries
- Spinal cord injuries
- Internal injuries
These medical expenses can add up quickly, especially when treatment continues for months.
Serious injuries may also affect a person’s ability to care for children, manage household responsibilities, or return to physically demanding work.
Vehicle Damage and Transportation Expenses
A damaged or totaled vehicle can make it difficult to get to work, attend medical appointments, pick up children, or complete everyday errands. While a vehicle is being repaired or replaced, plaintiffs may need to pay for rental cars, rideshare services, or public transportation.
Workplace Injury and Third-Party Liability Lawsuits
Workplace injuries can create financial hardship quickly because they often interfere directly with a person’s ability to earn a living.
Workers’ compensation may provide certain benefits after an on-the-job injury, but some injured workers may also have a third-party liability claim.
For example, a construction worker may be injured by defective equipment, a negligent subcontractor, or a driver who was not employed by their company. These cases can involve complex investigations, multiple parties, and extended negotiations.
Extended Recovery Periods
Injuries incurred at a workplace are often serious and can require long recovery periods. Some injured workers may need to take time away from work entirely, while others may be placed on work restrictions that limit their earning potential.
Ongoing Financial Obligations During Recovery
Rent or mortgage payments, utilities, groceries, insurance premiums, car payments, medical expenses, and family responsibilities continue even when income is reduced. Workers may face additional costs for transportation, home assistance, mobility equipment, or childcare.
Premises Liability Lawsuits
Premises liability lawsuits involve injuries caused by unsafe conditions on someone else’s property, such as:
- Slip-and-falls
- Uneven walkways
- Poor lighting
- Falling objects
- Broken stairs
- Hazardous flooring
These incidents can occur in a wide range of places, including grocery stores, restaurants, apartment buildings, parking lots, hotels, and office buildings.
Hidden Costs Beyond Initial Medical Bills
A person may initially seek treatment for pain or bruising, only to later learn they have other conditions requiring additional care. This can lead to unexpected costs for imaging, specialists, physical therapy, medications, mobility aids, and missed work.
Proving Liability Can Be Time-Consuming
Premises liability cases often involve disputes about whether the property owner knew (or should have known) about a dangerous condition. Attorneys may need to review surveillance footage, maintenance records, incident reports, inspection logs, witness statements, photographs, and property management policies.
Additionally, property owners and insurers may argue that the hazard was not present long enough to address, that the injured person was partly responsible, or that the condition was open and obvious.
These investigations and disputes can take time to resolve, which may extend the life of the case.
Catastrophic Injury Lawsuits Often Create the Greatest Financial Hardship
Catastrophic injuries are life-changing injuries that may require long-term medical treatment, ongoing care, or permanent lifestyle adjustments. These cases often involve:
- Traumatic brain injuries
- Spinal cord injuries
- Amputations
- Severe burns
- Paralysis
- Organ damage
- Multiple fractures
They can also involve other injuries that significantly affect a person’s independence and ability to work
Long-Term Medical Care and Life Adjustments
People with catastrophic injuries may require:
- Surgeries
- In-home care
- Physical therapy
- Occupational therapy
- Specialized equipment
- Mobility devices
- Home modifications
- Ongoing medication
- Assistance with daily activities
Family members may also need to take time away from work to provide care.
Reduced Earning Capacity and Future Financial Needs
A catastrophic injury can affect a person’s ability to return to their previous job or work at all.
When attorneys calculate damages in these cases, they may consider not only missed income but also reduced earning capacity, future medical needs, and the long-term cost of care. These evaluations often require input from medical professionals, vocational experts, and financial specialists.
FAQs About Personal Injury Lawsuits and Financial Hardship
Below are answers to some of the most common questions. For more information, visit our general FAQ page.
What types of personal injury cases cause the most financial hardship?
Cases involving catastrophic injuries, serious motor vehicle accidents, workplace injuries, and long-term medical treatment often create the greatest financial hardship because they may involve extended time away from work, significant medical costs, and ongoing care needs.
Why do personal injury lawsuits take so long to settle?
Cases often take time because attorneys must investigate liability, gather medical records, assess long-term treatment needs, negotiate with insurers, and prepare for litigation if settlement talks break down. More complex cases may also require expert input and court involvement.
Can I receive financial assistance while my lawsuit is pending?
Depending on your circumstances, options may include health insurance coverage, disability benefits, workers’ compensation benefits, or personal injury lawsuit funding for qualifying plaintiffs. It may be helpful to speak with your attorney and review available options before making financial decisions.
What expenses can create hardship during a personal injury lawsuit?
Medical bills, rehabilitation costs, rent or mortgage payments, transportation, childcare, insurance premiums, and general household expenses. Some plaintiffs also face additional costs for mobility equipment, home modifications, or caregiving support.
Does financial hardship affect the value of a settlement?
Financial hardship alone does not determine settlement value. But the underlying strains contributing to hardship, such as medical expenses, lost wages, reduced earning capacity, and ongoing care needs, may be included when calculating damages.
Can you file bankruptcy on personal injury lawsuits?
In some situations you can file bankruptcy even if you have a personal injury case, but it can affect your lawsuit depending on the type of compensation claim and timing. Any potential settlement or award may become part of the bankruptcy process, so it’s important to coordinate closely with both your attorney and a bankruptcy professional before making decisions.
When to Consider Pre-Settlement Funding During the Lawsuit Process
When a case is still pending and a settlement may be several months away, plaintiffs may need to explore ways to manage immediate expenses without feeling pressured to accept an offer that does not reflect the full value of their claim.
For qualifying plaintiffs, pre-settlement funding may be one option to consider. Although it is sometimes incorrectly called a “lawsuit loan,” it is structured differently from a bank loan and is based on the strength of the case rather than a credit score. Payment is tied to a successful case outcome, meaning there are no monthly payments while the case is pending.
Before moving forward, it is important to understand the terms, discuss the option with your attorney, and consider how it fits into your overall financial situation.
Work With Oasis Financial
Personal injury lawsuits can create financial hardship and place significant financial pressure on plaintiffs while they wait for resolution. Oasis Financial is here to help qualifying plaintiffs explore pre-settlement funding options during the legal process.
Don’t hesitate to contact our team with questions and, when you’re ready to take the next step, find funding near you or apply online.
This article is provided for general informational and educational purposes only and does not constitute financial, investment, legal, accounting, or tax advice. No attorney–client, advisory, fiduciary, or other professional relationship is formed by your access to or use of this content. You should not act or refrain from acting based on any information herein without obtaining advice from qualified professionals who are familiar with your particular circumstances. The authors and publisher make no representations or warranties, express or implied, and disclaim all liability for any loss or damage arising from reliance on or use of this article.
Oasis provides pre-settlement funding, also known as consumer litigation funding, to its customers through different products depending on their state of residence or cause of action. Many consumers will be provided pre-settlement funding in the form of a purchase agreement, which assigns a portion of the pending proceeds from their legal claim. Other consumers, such as those in CO, CT and SC will be offered a funding in the form of a pre-settlement loan, sometimes referred to as a lawsuit loan. These transactions have important differences, therefore, consumers should carefully review and be aware of the type of transaction that is offered to them by any funding company.