Apply Now 
Apply Now 
Apply Now 
Litigation financing, also known as lawsuit loans or pre-settlement funding, allows injured plaintiffs to access a cash advance against their future settlement. If you have a case with a high likelihood of success and a cooperative attorney, you may be able to get a lawsuit loan, but not in every state.
Each state in the U.S. establishes its own laws regarding lawsuit loans, so what is legal in one part of the country may not be permitted elsewhere. High Rise Financial walks you through the highlights of how each state’s laws apply to this beneficial financing alternative.
Lawsuit Loan Legality in Each U.S. State
Click on your state to find out if you can obtain a lawsuit loan there:
To apply for free, call (877) 735-0016
State-by-State Legality of Lawsuit Loans
In general, a state could take one of three potential stances on litigation funding. They may:
- Ban the practice through legislation or court decisions that decree the contracts as unenforceable. Champerty and maintenance doctrines are often cited as the underlying reason for the restriction to prevent external influences that could affect a case’s outcome.
- Regulate lawsuit loans by, for example, establishing interest rate and fee caps or requiring registration for funding companies operating in the state.
- Allow funding companies to provide financing in their jurisdiction by explicitly declaring it legal or simply remaining silent on the issue.
Alabama
Alabama law does not directly address lawsuit loans. Although state courts have brought the validity of these contracts under question in a few specific cases, the state has not gone so far as to ban the practice.
Legal? Yes
Validated by state courts? Yes, on a case by case basis
Do we provide legal funding in Alabama? Yes
Alaska
There are no laws in Alaska that address litigation funding. Champerty and maintenance doctrines are recognized here in other contexts, but courts have not applied them to legal funding agreements.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Alaska? Yes
Arizona
There are no laws on the books banning the practice in Arizona, so they are legal. However, several court decisions have invalidated specific lawsuit loan contracts, so they are not widely used as a source of financing.
Legal? Yes
Validated by state courts? No
Do we provide legal funding in Arizona? No
Arkansas
While lawsuit loans are allowed in Arkansas, state law highly regulates them. For example, legislators have imposed a relatively low rate cap, making it a less attractive location for lending companies to do business.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Arkansas? No
California
California law is favorable to the practice of lawsuit loans. No state codes ban or regulate it, and contracts are widely enforced. Additionally, the state bar permits lawyers to help facilitate these agreements for their clients.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in California? Yes
Colorado
According to Colorado law, litigation financing is treated as a loan, with strict rate caps on funding up to $75,000. Unfortunately, most cases do not qualify for such a sizable advance, so pre-settlement funding is rarely offered here.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Colorado? No
Connecticut
Connecticut law distinguishes between lawsuit loans for living expenses, which are allowed, and those intended to cover legal costs, which are not allowed. Because of this, funding companies must structure their agreements carefully, and recipients can only use the money for specific purposes.
Legal? Yes, in some circumstances
Validated by state courts? Yes
Do we provide legal funding in Connecticut? No
Delaware
Legally, funding companies can operate in Delaware if they stay out of the case and do not interfere with the outcome.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Delaware? Yes
Florida
Florida has no laws banning or regulating lawsuit loans. Additionally, courts have typically upheld these contracts as valid if there was no interference in the case’s outcome.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Florida? Yes
Georgia
Pre-settlement funding is allowed and freely practiced in Georgia. It is a non-recourse funding vehicle, meaning you do not have to pay it back if you lose your case. Therefore, Georgia does not consider the funds a loan, and state lending laws do not apply.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Georgia? Yes
Hawaii
There are no state laws that address lawsuit loans in Hawaii, and there have been no wide-reaching court cases to establish precedence. Because of this, litigation financing is legal and common in the state.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Hawaii? Yes
Idaho
Lawsuit loans are legal in Idaho, and courts have enforced related contracts in cases where the funding company stayed out of the litigation process.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Idaho? Yes
Illinois
Lending companies must be licensed in Illinois to practice here. State law also limits funding to $40,000 per case and caps the allowable interest rate at 36%. Because of these restrictions, pre-settlement financing is legal but not widely practiced.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Illinois? No
Indiana
Indiana law imposes restrictions on the amount of interest the litigation financier can charge. However, lawsuit loans are legal, and many lending companies offer services to plaintiffs throughout the state.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Indiana? No
Iowa
There are no state laws that impact the legality of lawsuit loans in Iowa. Precedence in common law has established that champerty and maintenance do not apply to these agreements. However, courts have invalidated contracts that were deemed contrary to the public good.
Legal? Yes
Validated by state courts? Yes, in most cases
Do we provide legal funding in Iowa? Yes
Kansas
Lawsuit funding is regulated as a loan under Kansas law, which places a restrictive cap on interest rates. Typically, only cases with significant injuries that qualify for advances of over $25,000 will be funded here.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Kansas? No
Kentucky
Kentucky courts have ruled that lawsuit loan contracts are champertous, making them void and unenforceable under state law.
Legal? No
Validated by state courts? No
Do we provide legal funding in Kentucky? No
Louisiana
The only law regulating lawsuit loans in Louisiana states that court officers cannot be involved in the sale or assignment of legal claims. Therefore, this means they are permitted in a vast majority of cases.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Louisiana? Yes
Maine
Maine regulates specific aspects of the lawsuit loan agreement but does not establish a rate cap on interest. For example, lenders must be registered with the state to do business here.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Maine? No
Maryland
Maryland law does not explicitly ban lawsuit loans, but it does establish strict interest rate caps on the practice. Because of these prohibitive restrictions, funding companies do not typically offer pre-settlement advances here.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Maryland? No
Massachusetts
Massachusetts is one of the most tolerant states for lawsuit loans. Courts threw out champerty and maintenance in the 1990s, and there are no laws in place that restrict legal funding.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Massachusetts? Yes
Michigan
Although Michigan courts have often ruled against the validity of legal funding contracts, there is no law prohibiting the practice, and it is widely available to plaintiffs.
Legal? Yes
Validated by state courts? Not always
Do we provide legal funding in Michigan? Yes
Minnesota
Until recently, lawsuit loans were prohibited in Minnesota on the grounds of champerty. However, the court ruled in 2020 that the champerty doctrine does not apply to these agreements, so they are currently allowed.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Minnesota? No
Mississippi
Mississippi state law prohibits champerty, and the courts will invalidate the contract if there is evidence of undue influence on the lender’s part. So, while not illegal, lawsuit loan agreements are only valid here if the lender remains a neutral third party.
Legal? Yes
Validated by state courts? Yes, in some cases
Do we provide legal funding in Mississippi? Yes
Missouri
Missouri courts continue to prohibit champerty and maintenance, so judges’ rulings have not been favorable to lawsuit loans in their state. However, no laws prohibit it, and it is practiced there on a limited basis.
Legal? Yes
Validated by state courts? Not always
Do we provide legal funding in Missouri? No
Montana
There are no laws or prohibitions against third-party litigation funding in Montana, as long as the lender is not an attorney.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Montana? Yes
Nebraska
Lawsuit funding is legal in Nebraska, and state law regulates it by requiring lenders to provide their clients with specific disclosures before signing an agreement. Lenders must also be registered with the state.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Nebraska? No
Nevada
Nevada also allows legal financing and requires lawsuit loan companies to be registered before providing services in the state. Additionally, the interest rates they enable these companies to charge are capped at a maximum of 40%.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Nevada? No
New Hampshire
Although the New Hampshire bar association forbids lawyers from lending money to clients, no state statutes affect the practice. Courts support the arrangement as well since the doctrines of champerty and maintenance are not enforced here.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in New Hampshire? Yes
New Jersey
Many states allow lawsuit loans by default, but New Jersey law expressly allows it in some instances. There are also no laws on the books that would limit or regulate it, and courts have supported the enforceability of these agreements.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in New Jersey? Yes
New Mexico
New Mexico legislation has remained silent on the issue of lawsuit loans. At the same time, however, courts here tend to invalidate these types of agreements when they are challenged. Therefore, although legal, lawsuit loans are relatively rare in New Mexico.
Legal? Yes
Validated by state courts? No
Do we provide legal funding in New Mexico? No
New York
Current New York law does not bar lawsuit loans, nor does it seek to regulate them. Court rulings have also been favorable toward these agreements in the state, upholding their validity when challenged.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in New York? Yes
North Carolina
Litigation financing is legal and regulated by annual percentage rate (APR) caps under North Carolina state lending laws. Additionally, state courts tend to support financing agreements if the lenders don’t meddle or attempt to stir up litigation.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in North Carolina? No
North Dakota
North Dakota does not prohibit or regulate lawsuit loans, and state courts are willing to uphold contracts if there is no interference in the case on the lender’s part.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in North Dakota? Yes
Ohio
Lawsuit funding is regulated in Ohio, with laws requiring specific elements for the contracts to be valid. For example, lenders must allow fund recipients a five-day window to cancel without penalty.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Ohio? Yes
Oklahoma
According to Oklahoma law, litigation financing companies must be licensed and registered with the state. Additionally, they must make required disclosures to potential clients before entering a binding agreement.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Oklahoma? Yes
Oregon
In Oregon, pre-settlement funding is not legislated or regulated by state statutes. And since the courts tend to uphold these agreements, they are a relatively common and freely available alternative for cash-strapped plaintiffs.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Oregon? Yes
Pennsylvania
Lawsuit loans are legal in Pennsylvania based on court precedence. However, the state laws take this legality a step further by protecting the communications between a plaintiff and a third-party lender under attorney-client privilege.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Pennsylvania? Yes
Rhode Island
Rhode Island courts will often uphold the rule of champerty, which could threaten a financing agreement. However, financing is allowed in the state, and there are no laws to block or limit them.
Legal? Yes
Validated by state courts? Not always
Do we provide legal funding in Rhode Island? Yes
South Carolina
South Carolina laws permit lawsuit loans, but strict regulations keep many lenders out, especially for smaller claims that wouldn’t qualify for an advance over $90,000.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in South Carolina? No
South Dakota
There are no South Carolina laws that address lawsuit loans, so they are permissible here. However, courts in the state tend to uphold champerty doctrines when the agreements are challenged.
Legal? Yes
Validated by state courts? Not always
Do we provide legal funding in South Dakota? Yes
Tennessee
Tennessee law caps the interest rate that lenders can charge and requires lenders to be registered in the state. However, lawsuit loans are legal and enforceable here.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Tennessee? Yes
Texas
Texas law is favorable to lawsuit loans, with no legislation or court precedence that limits the practice. Additionally, conversations between clients and funding companies are protected by attorney-client privilege, and lawyers can advance funds to their clients.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Texas? Yes
Utah
Pre-settlement loans are allowed in Utah, but regulations are stringent. For example, lenders must register with the state and provide clients with required disclosures and the right to cancel.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Utah? No
Vermont
Vermont also allows lawsuit loans with strict regulations. For example, licensed lenders may offer pre-settlement advances if they allow cancellation and disclose the interest rate, fees, and payback schedule.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in Vermont? No
Virginia
According to Virginia state law, lawsuit funding is explicitly permitted, and agreements are likely to hold up in court here if challenged.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Virginia? Yes
Washington
Washington state laws do not affect lawsuit loans in the state, and courts are unlikely to overturn contracts unless they violate public policy.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Washington? Yes
West Virginia
West Virginia laws technically allow lawsuit loans, but they cap the interest rate at 18%. Because of this restriction, pre-settlement funding is rarely offered in the state.
Legal? Yes, with restrictions
Validated by state courts? Yes
Do we provide legal funding in West Virginia? No
Wisconsin
Lawsuit loans are legal in Wisconsin, but they may be subject to invalidation by the court in some cases.
Legal? Yes
Validated by state courts? Not always
Do we provide legal funding in Wisconsin? Yes
Wyoming
Wyoming statutes do not address lawsuit loans, and courts have remained silent on the issue as well. Therefore, legal funding is allowed in the state.
Legal? Yes
Validated by state courts? Yes
Do we provide legal funding in Wyoming? Yes
Reach Out Today to Schedule a Consultation
Lawsuit loans are legal in most U.S. states. However, restrictions and court biases against it make legal financing challenging to practice in some areas of the country.
If you live in one of the states served by High Rise Financial, you don’t have to struggle to pay your bills while you wait for compensation to arrive. Contact us today to tell us about your case and find out what we can do to help.
Call or text (877) 735-0016 or fill out our form to apply today for free.
