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

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

Lawsuit Financial v. Curry: the facts

Mary Curry was hurt in a car crash on November 7, 1994. The defendants admitted liability in their pleadings, and a jury returned a $27 million verdict. Judgment was entered on April 10, 2000 (261 Mich. App. 579).

Nine days later a funding company advanced her $75,000. It advanced $100,000 more in July 2000 under a new agreement and $2,500 in October 2000, for a total of $177,500. The contracts said repayment depended on her recovery. The company’s claim was the greater of $887,500 or 10 percent of the proceeds. Curry signed a lien and a notice telling her lawyers to follow the company’s payment instructions.

The judgment was later reduced to about $4.79 million, and Curry settled for $4.7 million. When she did not pay, the company sued her and her law firm for $887,500. It claimed breach of contract and conversion against Curry, and conversion and interference with its contracts against the firm.

What the court decided

The trial court ruled on July 3, 2002 that the three transactions were usurious loans and that the company could recover only the $177,500 it paid out. The Court of Appeals affirmed in a per curiam opinion, released February 5, 2004 and approved for publication April 15, 2004.

• Loan, not a contingent investment. The court quoted an earlier case: “The hallmark of a loan is the absolute right to repayment.” Despite the contingency wording, it found that right here because the money came after liability was admitted and the verdict was in. In its words, Curry “was certain to recover some damages” when the money was advanced.
• The lien argument failed. The company said it might receive nothing unless Curry recovered at least about $2.3 million, after a $1.2 million lien and attorney fees. The court found the contracts mentioned no other liens and no minimum recovery, and applied them as written.
• Usurious. Demanding $887,500 on $177,500 “exceeded the legal rate,” which the court identified as 7 percent a year under MCL 438.31.
• Remedy. Under MCL 438.32, the lender could not recover interest or charges, and the borrower could recover her attorney fees.
• The law firm was not liable. The company had no property interest in the $887,500, so its conversion claims failed, and the firm was Curry’s agent, not an outside party who could interfere with her contracts.

What Curry does and does not decide

The ruling turns on timing. Curry did not decide whether an advance made early in a case, before anyone has admitted fault, is a loan. The court’s reasoning rests on the lack of real risk once the verdict existed, so an early-stage advance where the client could lose everything may be treated differently. The opinion also does not discuss champerty or unconscionability, though Curry raised unconscionability in the trial court.

For readers today, the case is most relevant to money advanced after a verdict or settlement, when collection is close to certain. Our page on post-settlement funding covers that stage.

Michigan’s usury statutes

• MCL 438.31 sets interest at “$5.00 upon $100.00 for a year” unless the parties agree in writing to a different rate, which may not exceed 7 percent a year. The section excludes some loans that other state or federal laws regulate, so a lender licensed under another statute may be held to that statute’s limits instead.
• MCL 438.32 says a lender whose contract does not comply cannot recover interest, official fees, delinquency or collection charges, attorney fees or court costs, and the borrower can recover attorney fees and court costs.
• MCL 438.41 makes it criminal usury to knowingly charge “at a rate exceeding 25% at simple interest per annum” when not authorized by law, punishable by up to 5 years in prison or a fine of up to $10,000.

We did not find a Michigan statute written for consumer lawsuit funding, a published position from the Michigan Attorney General or the Department of Insurance and Financial Services on these advances, or a pending Michigan bill we could verify on the Legislature’s site. We also could not verify the current text of Michigan’s lawyer ethics rule on financial assistance to clients, so ask your own lawyer what the rule allows before relying on it.

Your filing deadline in Michigan

Under MCL 600.5805(2), the period is “3 years after the time of the death or injury for all actions to recover damages for the death of a person or for injury to a person or property,” unless another part of the section provides otherwise. Other rules apply to some claims. An advance does not pause this clock.

What to ask before you sign

• Has liability been admitted, or is there a verdict or settlement already? If so, Curry suggests a Michigan court could treat a contingent advance as a loan.
• What is the yearly rate once all fees are added, and how does it compare with the 7 percent and 25 percent figures in Michigan’s statutes?
• Is the company licensed under any Michigan lending law, and which one?
• Does the contract direct your lawyer to pay the company from your settlement? See how a lawsuit advance is paid back and what happens if you lose your case.

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.