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

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

Who the Tennessee act covers

The act, Tenn. Code 47-16-101 to 47-16-110, was passed in 2014 (Acts 2014, ch. 819). Section 47-16-102 defines a consumer as a natural person who resides, is present or is domiciled in Tennessee, or who is or may become a plaintiff in a dispute in Tennessee. Litigation financing is a non-recourse transaction in which money is provided to you in exchange for a contingent interest in your potential recovery.

Three things fall outside the act. The first is a lawyer’s own contingency fee services or advanced legal costs, when provided under the Tennessee Rules of Professional Conduct. The second is a claim under Tennessee’s Workers’ Compensation Law. The third is a commercial tort claim. So the act reaches advances to individuals on injury and other civil claims, and not workers’ comp.

Registration and bond

No company may make a litigation financing transaction in Tennessee unless it is registered with the Secretary of State (47-16-103). It must file with the Secretary of State a $50,000 surety bond “payable to this state for the use of the attorney general and reporter.” The bond also covers anyone with a claim against the company for violating the act. Registration changes must be filed within 30 days.

The Tennessee fee caps

Section 47-16-110 sets two separate limits:

• an annual fee of “not more than ten percent (10%) of the original amount of money provided,” charged only once a year for any one legal claim
• underwriting, organization and other charges of no more than $360 a year for each $1,000 of unpaid principal

The same section says a transaction may not exceed a term of 3 years and bars a new agreement that folds the obligations from an earlier transaction into it.

Example only: assume a hypothetical $10,000 advance with nothing repaid. The annual fee could be up to $1,000 a year, and the other charges up to $3,600 a year, for as much as $4,600 a year. Over the 3-year maximum term that is up to $13,800 in charges, or $23,800 in total. Those are ceilings under the statute’s wording; your contract terms decide what you owe and may be lower.

What the contract must show

The contract must be completely filled in when it is presented to you (47-16-104). Section 47-16-106 requires bold type of at least 14 points, and these items on the front page:

• the total amount the company provides
• the maximum you can be required to pay, including all fees, charges and interest
• the maximum annual percentage fee
• a “Consumer’s Right to Cancellation” notice with instructions for returning the money

The body must state that the company has no right to make decisions about your case, which stay with you and your lawyer. A boxed notice in capitals says that if there is no recovery, or not enough, you owe nothing beyond what is recovered. Above your signature, the contract warns you not to sign before reading it completely, tells you that you are entitled to a fully filled-in copy, and recommends a lawyer’s advice and, where appropriate, a tax advisor or accountant. Our page on whether a lawsuit advance is taxable covers that last point.

Cancelling and your lawyer’s acknowledgment

You may cancel without penalty within 5 business days after you receive the money or sign the contract, whichever is later, by giving notice and returning the money (47-16-104). Section 47-16-106 adds that the notice must explain how to return it by mail or in person. Our right to cancel page compares Tennessee’s window with other states.

The contract must include your written statement of whether you have a lawyer. If you do, your lawyer must sign an acknowledgment stating that the lawyer had the chance to review the contract, whether the lawyer is paid on contingency under a written fee agreement, that all case proceeds will be paid out through the lawyer’s trust account or a settlement fund, that the lawyer represents you in the dispute, and that no referral fee or other payment has been or will be exchanged with the company.

What a Tennessee funder may not do

Under 47-16-105, a company may not:

• pay or accept referral fees with attorneys or medical providers
• advertise false or misleading information
• refer you to a specific attorney; an unrepresented consumer may be sent only to a bar or nonprofit lawyer referral service
• fail to promptly give you and your lawyer copies of every complete contract
• try to get you to waive any remedy, or to accept mandatory arbitration or give up a jury trial
• give you legal advice about the funding or your case
• assign or securitize your contract, except to a subsidiary or affiliate or as a permitted security interest where the company keeps collection duties

Enforcement and how to complain

Any violation of the act makes the contract “unenforceable by the litigation financier, the consumer or any successor-in-interest” (47-16-107). A violation is also an unfair or deceptive act under the Tennessee Consumer Protection Act of 1977, enforced “solely by the attorney general and reporter” at the Attorney General’s discretion, with that act’s sanctions and remedies (47-16-108). If you think a company broke these rules, tell your lawyer, because the unenforceability rule can matter when the settlement is paid out.

The Attorney General’s office takes consumer complaints through an online form or a printable form that you sign and return by mail, email or fax (how to file). For updates on a complaint, the office lists consumer.affairs@ag.tn.gov and 615-741-4737. Its address is P.O. Box 20207, Nashville, TN 37202, and it suggests first raising the problem with the business.

Tennessee’s short filing deadline

Tennessee gives most injury plaintiffs only 1 year after the cause of action accrues to sue (Tenn. Code 28-3-104(a)(1)). The period becomes 2 years if the person who caused the injury is criminally charged for the same conduct within that first year and you sue that person. Getting an advance does not extend either deadline, so the lawsuit itself has to be on schedule.

What to ask before you sign

• What is your registration with the Tennessee Secretary of State?
• What is the annual fee as a percentage of the original amount, and what other charges apply per $1,000?
• What is the maximum I could owe, and when does the 3-year term end?
• Has my lawyer reviewed the contract and signed the acknowledgment?
• Will you sell or assign my contract to anyone?

Before deciding, read alternatives to pre-settlement funding. The state law table shows 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.