Can I get a cash advance on my lawsuit in Alabama, and what does Alabama law say?

By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.

No funding statute in Alabama

The Code of Alabama has no chapter on consumer legal funding. It sets no registration rule for funders, no cancellation period, no required disclosures and no cap written for these contracts. We did not verify any pending or failed Alabama bill on the subject, so none is described here. The state law table shows what states with a statute require.

Without a statute, an Alabama advance is tested against older law: the interest statutes, the consumer lending licenses, and the public policy rules the court used in Wilson.

Wilson v. Harris: advances against a judgment on appeal

Annie Ruth Harris won a $4 million wrongful-death judgment that was on appeal. Between March 1992 and June 1994, Willie George Wilson gave her cash advances totaling $4,749. She signed two agreements in April 1992. One recorded a $1,300 loan, contemplated more loans of up to $400 a month and a later assignment of 15% of her recoveries from pending suits. The other assigned Wilson one-third of the money due under the judgment. Harris testified she understood that if she recovered nothing, she would owe him nothing (Wilson v. Harris, 688 So. 2d 265).

The trial court ruled for Harris, and the Court of Civil Appeals affirmed. It found the deal was not champerty in the strict sense, because Wilson did not fund the wrongful-death suit itself, but said it had “some of the elements of champerty.” Quoting an earlier Alabama case, Lott v. Kees, the court wrote that “the doctrine of champerty is directed against speculation in lawsuits.” It held that the agreements rested on a gambling consideration, payment “upon the happening of an uncertain event over which neither party had control,” and that “the agreement violates public policy and is therefore void.”

Wilson still got a judgment for $4,749, the total he advanced. He lost the share of the judgment he had bargained for.

Wilson involved one individual, not a funding company, and it is three decades old. A court today would read the actual contract. Still, it is the Alabama appellate decision closest to a modern advance that we found.

Alabama’s interest and licensing laws

Alabama’s base rule limits interest “by written contract” to “$8 upon $100 for one year,” that is, 8% (Ala. Code 8-8-1). A broader rule lets parties agree to any rate when “the original principal balance” is “not less than $2,000,” and says the section “shall not apply” below that amount. The same section keeps in force “all laws relating to unconscionability in consumer transactions,” including the Mini-Code (Ala. Code 8-8-5).

Two licensing laws may also matter. The Small Loan Act bars anyone “in the business of lending in amounts of less than one thousand five hundred dollars ($1,500)” from charging more than the interest a non-licensee could charge without first getting a license from the supervisor (Ala. Code 5-18-4). The Mini-Code requires a license from the administrator for “making consumer loans to Alabama residents” (Ala. Code 5-19-22), and the administrator is “the Superintendent of Banks of the State Banking Department” (Ala. Code 5-19-1).

Each of these laws applies to loans. Whether an advance you repay only from a recovery is a loan is the central question, and courts outside Alabama have split on it, as our page on whether a lawsuit cash advance is a loan explains. We found no Alabama decision applying these statutes to a funding company’s contract.

Alabama’s rule lets a lawyer help in a true emergency

Alabama’s version of Rule 1.8(e) differs from the ABA Model Rule on living expenses. Besides advancing court costs, a lawyer may advance “emergency financial assistance to the client,” or stand behind a loan to the client from someone else, but repayment “may not be contingent on the outcome of the matter,” and no promise of help can be made before the lawyer is hired (Ala. R. Prof. Conduct 1.8).

The comment limits this to “true financial emergencies, arising from circumstances beyond the control of the client.” The client “is always responsible for repayment of any loan, whether the client wins or loses,” and the help “does not include the regular provision of income and support.” The lawyer is never obligated to offer it. So an Alabama lawyer’s emergency loan is a real debt, unlike most funding contracts. See can my lawyer give me money before settlement.

Your two-year deadline

An advance does not stop the clock. Under Ala. Code 6-2-38(l), “all actions for any injury to the person or rights of another not arising from contract and not specifically enumerated in this section must be brought within two years.” Other deadlines apply to some claims, so ask a lawyer early.

Filing a complaint in Alabama

The Attorney General’s Consumer Interest Division takes complaints through its online consumer complaint form. The consumer hotline is 1-800-392-5658 or 334-242-7335. Documents can be uploaded with the form or emailed to ConsumerInterest@AlabamaAG.gov. The office says a complaint “is not a legal action” and that it does not give legal advice.

What to ask before you sign

• Is this a loan I must repay no matter what, or do I owe nothing if I recover nothing? Put the answer in writing.
• If the amount is under $2,000 or under $1,500, does the company hold an Alabama license, and which one?
• What would I owe at 6, 12 and 24 months, and is there a ceiling?
• Does the contract choose another state’s law, and why?
• Has my lawyer asked whether an emergency loan under Rule 1.8(e) fits my situation?

Our pages on contract red flags and what happens if you lose cover the terms to check.

Common questions

Related pages

Cash advance on a lawsuit · Laws by state · Injury law FAQs

Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.