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

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

The Colorado Supreme Court case: Oasis v. Coffman

In an April 2010 opinion letter, the Administrator of the Uniform Consumer Credit Code (UCCC) concluded that companies making these advances had to comply with the code, including its licensing rules. In September 2010 she found that two funding companies had violated the UCCC and the Colorado Consumer Protection Act. The companies told the court they stopped doing business in Colorado after that letter, and they sued for a ruling that their contracts were not loans (2015 CO 63).

The opinion describes what the contracts looked like. The advances were usually under $1,500 and could not be used to pay for the lawsuit itself. One company called its contract a “Purchase Agreement” and said it was buying part of the proceeds. The other called its contract “an investment and not a loan.” In both, the client and the lawyer kept full control of the case. The payoff grew with time. On one sample schedule, a $1,234 advance cost $1,851 if repaid within six months, $2,776.50 at 12 to 15 months, and $4,010.50 at 24 to 30 months.

The trial court and the court of appeals sided with the state, and on November 16, 2015 the Supreme Court affirmed. Its reasoning:

• The UCCC defines a loan to include “the creation of debt by the lender’s payment of or agreement to pay money to the consumer,” and the court said “a debt is an obligation to repay.” That obligation “need not be unconditional.”
• The court looked at how the deals worked in practice and noted that “in eighty-five percent of cases, the companies fully recover.”
• The growing payoff “is a finance charge and a hallmark of a consumer loan under the UCCC,” whatever the contract calls it.
• The “sale” label failed because the companies “do not step into the tort plaintiffs’ shoes.”

Two limits matter for readers today. The court did not decide whether any particular rate was illegal, and it said whether this kind of funding is good for consumers is “a question better suited to the legislature.” For the wider debate about the loan label, see is a lawsuit cash advance a loan.

What the Uniform Consumer Credit Code requires

Because Oasis puts these advances inside the UCCC, the code’s rules for consumer loans are the rules a Colorado contract has to follow. All quotes below are from the official Colorado Revised Statutes, Title 5.

• License. A loan with a finance charge above 12 percent a year is a “supervised loan” (section 5-1-301(47)). Under section 5-2-301, no one may make supervised loans unless it is a supervised financial organization or “has first obtained a license from the administrator.”
• Finance charge limit. Section 5-2-201(2) caps the charge on a supervised loan at the greater of two figures: 36 percent a year on the part of the balance up to $1,000, 21 percent on the part from $1,000 to $3,000, and 15 percent above $3,000; or a flat 21 percent a year on the whole balance.
• What counts. A “finance charge” is the sum of all charges payable “as an incident to or as a condition of the extension of credit,” including service and carrying charges “however denominated” (section 5-1-301(20)).
• Consumer remedies. If a lender makes supervised loans without the license, “the consumer is not obligated to pay the finance charge” and a court may award a penalty of up to three times that charge. A consumer also “is not obligated to pay a charge in excess of that allowed by this code” and can get a refund of an excess charge (section 5-5-201). That section sets short deadlines to sue, so read it early.

The UCCC Administrator is an assistant attorney general (section 5-6-103), so complaints go to the Department of Law.

Champerty and other Colorado rules

Champerty is the old rule against an outsider paying for someone’s lawsuit in exchange for a share of the result. The Oasis opinion does not discuss it. In an old case, the Colorado Supreme Court held that an assignment of an interest in a lawsuit was “not champertous” and said champerty survived in Colorado only through statutes on maintenance and barratry (O’Driscoll v. Doyle, 31 Colo. 193 (1903)). We found no modern Colorado appellate decision voiding a consumer advance as champerty.

Colorado did pass one litigation funding law. HB25-1329, signed June 3, 2025 and effective August 6, 2025, places disclosure requirements and limits on foreign third-party litigation funders. It does not set rules for ordinary consumer advances.

Can a Colorado lawyer give you money instead?

Usually not for living expenses. Colorado Rule of Professional Conduct 1.8(e) bars a lawyer from giving “financial assistance to a client in connection with pending or contemplated litigation.” A lawyer may advance court costs and litigation expenses, with repayment contingent on the outcome. Lawyers who represent indigent clients without a fee may give “modest gifts” for food, rent, transportation and medicine, but a comment to the rule says that exception does not reach “contingent-fee personal injury cases” (Colo. RPC 1.8 and cmt. 13).

Your filing deadline in Colorado

A cash advance does not stop the clock on your own case. In Colorado, most tort actions, including negligence, must be filed within two years (C.R.S. 13-80-102(1)(a)). Tort actions for bodily injury from the use or operation of a motor vehicle get three years (C.R.S. 13-80-101(1)(n)). Both are in the official Title 13 text, and other deadlines apply to claims against public entities.

What to ask before you sign

• Is the company licensed by the Colorado UCCC Administrator to make supervised loans? Ask for the license and check it with the Administrator.
• What is the total finance charge at 6, 12, 24 and 36 months, and how does that compare with the limits in section 5-2-201?
• Does the contract call itself a purchase, an investment or a sale? After Oasis, the label does not change how Colorado law treats it.
• Has your lawyer read it? Our contract red flags page lists terms to look for, and how much pre-settlement funding costs explains how charges add up.

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.