Can I get a cash advance on my lawsuit in California?

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

Where the law comes from

AB 931 was chaptered on October 10, 2025 as Chapter 565 of the Statutes of 2025 and added Article 17 to the State Bar Act, the part of the code that governs lawyers (Article 17). Section 6250 sets the definitions. A “consumer” is a person with a pending legal claim who lives or is domiciled in California. “Consumer legal funding” is a “nonrecourse transaction” in which a company buys, and you assign, a contingent right to part of what your case may bring in. “Charges” covers every amount you pay above the money you received, including interest and fees “no matter how denominated” (AB 931 chaptered text). Section 6255 says you may assign that contingent right. The statute never calls these deals loans or says they are not loans; it regulates them as a sale of part of your future recovery.

What the contract must contain

Section 6251 requires a written contract in plain language, with every term filled in when it is first shown to you and your initials on each page. If you negotiated in a language other than English, you get copies in English and in that language. The contract must state the most you could owe, explain how charges accrue, and say you owe nothing beyond the disclosed fees. A prepayment penalty is not allowed (B&P 6251).

Section 6252 adds a first-page box, in “clear and conspicuous language,” showing the funded amount, each one-time charge, the maximum total you assign to the company and the dates payments come due. The contract must also say the company has no role in deciding “whether, when, or for what dollar amount” your claim settles, although the company may ask for status updates and you or your lawyer must tell it how the case ended (B&P 6252).

How the price is set, the 36-month limit and cancelling

California sets no dollar or percentage cap. It controls the shape of the price instead. Section 6253 requires the amount owed to be “a predetermined amount based upon intervals of time from the funding date through the resolution date,” and it may not be a percentage of your recovery (B&P 6253). Section 6250(a) adds a time limit: “Those charges shall not exceed 36 months from the funding date.” The Senate Judiciary Committee’s analysis describes the same limit.

Example only, with round hypothetical numbers. Suppose a contract for a $5,000 advance lists what you would owe at each stage: $6,500 if the case ends within 12 months, $8,000 within 24 months and $9,500 within 36 months. Under section 6253 the table is fixed by dates, so a bigger settlement does not raise the payoff, and under section 6250(a) the charges should not keep growing after month 36. Your own contract’s terms decide the real numbers.

Your five days to cancel

You may cancel within five business days after the funding date, “without penalty or further obligation,” by returning the full amount you received. The contract must spell this out in the wording section 6252(a)(2) supplies. More on timing in can I cancel a lawsuit funding contract.

Your lawyer’s role and the ban on side deals

The contract must include your attorney’s written statement that the attorney reviewed the disclosures with you, works on a written contingency fee, will run the settlement through the client trust account, will pay the company as the contract says, and has received and will receive no referral fee or other consideration from the company. Without that acknowledgment the contract is void. If you later change lawyers, the contract stays in force (section 6251(c)-(e)). See does my lawyer have to sign a funding contract.

Section 6256 aims at the lawyers. Your attorney and the attorney’s immediate family may not hold a financial interest in a funding company, and your attorney may not provide consumer legal funding to you directly. A lawyer who referred you to your attorney is also barred from owning part of the company funding you. Your attorney may not share privileged information with a funder without your written consent, and sharing at your request “shall not otherwise void the attorney-client privilege.” A lawyer who breaks these rules faces State Bar discipline (B&P 6256). See lawsuit funding and attorney-client privilege.

Under section 6254(a) the company may not pay or accept referral fees from lawyers, steer you to a particular lawyer (a local bar’s public referral service excepted), fund you over an earlier assignment without paying it off, make decisions about your claim or settlement, ask you to waive rights such as a jury trial, pay court costs or attorney fees from the funding, or condition the money on firing your lawyer (B&P 6254).

Who enforces it, and where to complain

The Act names no state agency and creates no license or registration. The Senate Judiciary analysis said this product “does not fall within existing regulatory structures” (Senate Judiciary analysis), so enforcement runs through the courts and the State Bar.

• Against a company: under section 6254(b), a company that breaks the section 6254(a) rules is liable for automatic termination of the contract, statutory damages of up to $10,000 per violation or three times actual damages, whichever is greater, plus attorney’s fees and costs and injunctive or declaratory relief.
• Against a lawyer: you can file a complaint with the State Bar of California online at apps.calbar.ca.gov/complaint or by calling 800-843-9053 in California (213-765-1000 from outside the state), per the State Bar’s complaint page.

Other California rules that still apply

What your California lawyer may do

California Rule of Professional Conduct 1.8.5 generally bars a lawyer from paying a client’s personal expenses. It has exceptions: after being hired, a lawyer may lend a client money on the client’s written promise to repay, if the lawyer first meets the conflict and business-transaction rules (1.7(b), 1.7(c) and 1.8.1), and a lawyer may advance case costs with repayment contingent on the outcome (Cal. Rules of Prof. Conduct, rule 1.8.5). Because the loan exception applies only after retention, a lawyer cannot offer a loan to get your case. See can my lawyer give me money before settlement.

Your filing deadline still runs

An advance does not pause your case. Most California injury lawsuits must be filed within two years under Code of Civil Procedure section 335.1 (CCP 335.1), and claims against public agencies have much shorter claim deadlines. Our page on how long you have to sue after a car accident has the details.

What to ask before you sign

• Does the first page show the funded amount, each one-time charge, the maximum I could owe and the payment dates?
• Is the payoff a fixed amount for each time period, and does the schedule stop growing at month 36?
• Has my lawyer signed the acknowledgment section 6251(c) requires?
• What date is my fifth business day to cancel?

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.