Can I Get a Cash Advance on My Lawsuit in Indiana?

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

How Indiana defines a CPAP transaction

Indiana Code 24-12 was added in 2016 (P.L. 153-2016) and rewritten in 2019 by House Enrolled Act 1447, which moved licensing out of the consumer credit code and into this article as of July 1, 2019, according to the Department of Financial Institutions advisory.

A CPAP transaction is a “nonrecourse transaction in which a CPAP provider provides a funded amount to a consumer claimant,” repaid only if you prevail and only from the proceeds of the case. A consumer claimant is an individual “who is or may become a plaintiff, a claimant, or a demandant in a civil proceeding.” “Charges” means everything above the funded amount, and the term “includes all administrative, origination, underwriting, and other fees no matter how denominated” (IC 24-12, NCOIL copy). Chapter 6 says a transaction that follows the article is not treated as a loan under Indiana’s other loan laws.

What a provider can charge

IC 24-12-4.5-2 sets three limits for transactions offered or entered into after June 30, 2019:

• a fee “calculated at an annual rate that does not exceed thirty-six percent (36%) of the funded amount”;
• a servicing charge at an annual rate of no more than 7% of the funded amount;
• document charges totaling no more than $500 per civil proceeding.

Both yearly charges are “earned at consummation and each year after consummation on the anniversary of the funding date,” and the charges “are not subject to refund or rebate.” A provider may not collect any other fee. Both percentages are figured on the funded amount, so the charges do not compound.

Example only: a provider funds $10,000 and charges the maximums. One year of charges would be $3,600 plus $700, and document charges could add $500. Because a year’s charges are earned at signing, a case that pays in month 10 could owe $14,800. If the case pays in month 14, after the first anniversary, a second year’s $4,300 is earned, for $19,100. Your contract may charge less, and its terms decide what you owe.

What the contract must say

Under IC 24-12-2-1, the contract “must be completely filled in” when you sign it, must carry your initials on each page, and must include a boxed, bold notice that you can cancel within five business days after the funding date by returning the money, either by delivering the uncashed check in person or by mailing the funds by insured, certified or registered mail.

Chapter 4 adds disclosures in at least 12-point bold type. The front page lists the funded amount, each one-time charge, the total you assign and the amount due at the end of each six-month period. A box must say, in capitals, that the funded amount and charges “SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR CIVIL PROCEEDING,” and the contract must state that the provider has no role in deciding whether, when or for how much the case settles. You or your lawyer must also give written notice of the contract to the other parties and to any insurer with a duty to defend, and that notice cannot be used as evidence.

Your lawyer’s role

If you have a lawyer, the lawyer must sign a written acknowledgment that, to the lawyer’s knowledge, all costs and charges were disclosed, that the lawyer works on contingency under a written fee agreement, that case proceeds go through the lawyer’s trust account or a settlement fund, that the lawyer is following your instructions on the transaction, and that the lawyer has received no referral fee from the provider. Without it, “the CPAP contract, and the CPAP transaction to which it pertains, are void.” The contract stays enforceable if you or the lawyer later end the representation. See does my lawyer have to sign a funding contract.

Your lawyer, and any lawyer who referred you, may not have a financial interest in the provider (chapter 7). Communications between your lawyer and the provider do not waive the attorney-client privilege or work-product protection (chapter 8), a topic covered in lawsuit funding and attorney-client privilege.

Indiana lawyers cannot fill the gap themselves. Indiana Rule of Professional Conduct 1.8(e) bars a lawyer from giving a client financial assistance in pending or contemplated litigation, except advancing court costs and litigation expenses (repayment may depend on the outcome) and paying those costs for an indigent client.

What providers may not do, and who enforces the law

IC 24-12-3-1, last amended in 2024, bars a provider from paying or accepting referral fees with lawyers, medical providers, chiropractors or physical therapists, from steering you to a particular lawyer or doctor (a bar referral service is allowed), from paying court costs or attorney’s fees out of the funding, and from making or influencing decisions about the case: “The right to make these decisions remains solely with the consumer claimant and the attorney.” It also may not fund you while an earlier provider is unpaid unless it pays that provider off or the earlier provider agrees in writing; a second advance explains why that matters.

A provider that makes more than 15 CPAP transactions a year needs an annual license from the Department of Financial Institutions, renewed by December 31, and the department may require a bond of up to $50,000. The department enforces the article and may impose civil penalties. If a court finds an intentional violation in your transaction, the provider “is entitled to recover only the funded amount.”

To complain, use the DFI’s complaint page and complaint form. The DFI contact page lists 317-232-3955, toll-free 800-382-4880, and 30 South Meridian Street, Suite 200, Indianapolis, IN 46204.

Watch your filing deadline as well. Under IC 34-11-2-4, an action for injury to a person “must be commenced within two (2) years after the cause of action accrues,” with a longer period for child sexual abuse claims.

What to ask before you sign

• What fee rate and servicing rate does this contract use, and what will I owe just before and just after each anniversary?
• What document charges are included, and are they part of the $500 limit?
• Do you hold a current Indiana DFI license?
• Has my lawyer signed the acknowledgment yet?
• Is any earlier advance on my case still unpaid?

How a lawsuit advance is paid back walks through the payoff at settlement, the state law table compares Indiana with other states, and the lawsuit cash advance guide covers the basics.

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.