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

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

The 2026 bills that would have settled it

House Bill 1298, “Third-Party Litigation Financing – Licensing and Regulation,” was sponsored by Delegate A. Johnson. The legislature’s synopsis says it would prohibit a litigation financier from providing litigation financing “unless licensed under the Maryland Consumer Loan Law or provisions of law relating to installment loans.” It would also treat litigation financing as a loan for certain purposes, require disclosure of financing contracts in certain civil actions, and make related information discoverable. Its Senate cross-file was SB 894, sponsored by Senator Gile.

The House Economic Matters Committee set HB 1298 for a March 3, 2026 hearing, and the Senate Finance Committee set SB 894 for a February 27 hearing. Neither page shows a committee vote or any later action, and we found no record that either bill passed. The laws by state table will be updated if Maryland enacts a law.

What the Attorney General’s office told lawmakers

The Consumer Protection Division’s written testimony, dated March 3, 2026, took the position “support with amendments.” Its main points:

• It backed the licensing part, which “requires providers to be licensed and regulated by the Office of Financial Regulation.”
• It acknowledged that providers argue their products are not loans, then said the Division and the Commissioner “have viewed these products as loans for many decades,” and that the bill’s section 12-1303 “is consistent with current law.”
• It asked the committee to strike the disclosure and discovery sections, 12-1304 and 12-1305, saying they “will only serve to give defendant parties and insurance companies an unfair advantage in litigation.” It added that a funding contract can already be discoverable when a party shows it is relevant.
• On price, it wrote that what these companies typically charge appears to be “a guarded secret in the industry.”

Testimony is a statement of position. It is not a regulation and not a court ruling, so a company could still argue in court that its contract is something other than a loan. Still, it tells you how Maryland’s consumer regulators read the law today. For the privacy side of disclosure, see lawsuit funding and attorney-client privilege.

The Maryland Consumer Loan Law

If an advance is a loan, two statutes come into play.

Licensing. Under Financial Institutions § 11-203.1(a), “Unless a person is licensed by the Commissioner, the person may not” make a loan or “in any way use any advantage provided by the Maryland Consumer Loan Law.”

Interest ceilings. Commercial Law § 12-306(a) sets maximum rates for Consumer Loan Law lenders. Under paragraph (6), a lender may charge up to 2.75 percent a month on the unpaid principal up to $1,000 and 2 percent a month on the amount above $1,000, for a loan of $2,000 or less. For a loan above $2,000, the ceiling is 2 percent a month on the whole unpaid balance. That paragraph comes with conditions in paragraph (7), and the section has other tiers, so read it in full.

Those are statutory ceilings for licensed lenders. They tell you nothing about what a given company would charge you, and whether they apply to a particular advance depends on whether a court or the Commissioner treats it as a loan. For how other states’ courts have answered that question, see is a lawsuit cash advance a loan. For how the charges in these contracts are built, see how much pre-settlement funding costs.

Champerty in Maryland

Champerty is the old rule against an outsider paying for someone else’s lawsuit in return for part of the recovery. We found no Maryland appellate decision applying it to a consumer advance, and the 2026 testimony does not mention it. In Maryland the live argument is the loan question above.

Your deadline in Maryland

Under Courts and Judicial Proceedings § 5-101, “A civil action at law shall be filed within three years from the date it accrues” unless another provision of the Code sets a different period. Some injury claims have shorter or different deadlines and notice rules, so ask a lawyer early. Funding does not pause this clock.

Where to complain in Maryland

The Attorney General’s Consumer Protection Division takes complaints through its online portal or by mail to 200 St. Paul Place, 16th Floor, Baltimore, MD 21202. Its consumer hotline is 410-528-8662, Spanish-language help is at 410-230-1712, and the toll-free number in Maryland is 1-888-743-0023 (complaint page).

What to ask before you sign

• Is the company licensed by the Maryland Commissioner of Financial Regulation? Given the regulators’ view, ask for the license number and check it.
• How does the total charge, stated as a yearly rate, compare with the Commercial Law § 12-306 ceilings?
• Does the contract say it is governed by another state’s law, and has your lawyer told you whether a Maryland court would follow that?
• If the defense asks about funding in discovery, what will be produced?

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.