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

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

What chapter 74 covers

Vermont’s consumer litigation funding law, 8 V.S.A. 2251 to 2260, was enacted as Act 128 of the 2015 adjourned session, which met in 2016, and has been amended several times since, most recently by Act 142 of the 2025 adjourned session. Section 2251 defines a consumer as a natural person who is seeking or has obtained funding for a pending claim, if the claim is in Vermont, the person lives or is domiciled in Vermont, or both.

Consumer litigation funding is “a nonrecourse transaction in which a company purchases” a contingent interest in the proceeds of your claim, so nothing is owed if there is no recovery. “Charges” means “the amount a consumer owes to a company in addition to the funded amount,” including fees and anything labeled interest. The law also defines “net proceeds,” which is your recovery minus items such as attorney’s fees, litigation costs, certain medical liens, third-party reimbursement claims and workers’ compensation liens. That figure matters because, as explained below, it marks the most you can owe.

License and bond

A company needs a license under chapter 74 before doing this business in Vermont (2252(a)). The current text of 2252 reflects Act 142’s amendments, effective July 1, 2026. Applicants must provide, and licensees must keep, a surety bond or irrevocable letter of credit equal to the greater of $50,000 or “double the amount of the company’s largest funded amount in Vermont” in the prior three calendar years (2252(b)). The Commissioner may examine a company as often as needed to protect consumers (2256), and by April 1 each year every licensee files a sworn report listing its number of contracts, total funded amounts, the charges and annual rate of return on each contract, and how many transactions were paid in full versus paid below the contract amount (2260).

No charge cap, but a rate disclosure

Vermont does not limit how much a company can charge. Instead it requires the price to be stated plainly. Under 2253(a), the contract must be clear and written in words an average consumer can understand without professional help. Under 2253(b), the front page must carry these disclosures in a form the Commissioner prescribes:

• alternatives to consumer litigation funding
• that some or all of the money may be taxable
• your right to cancel
• the total funded amount and an itemized list of charges
• the annual percentage rate of return
• the total amount due
• that no other fees apply, and the cumulative amounts due if you have more than one contract
• that the company has no role in decisions about your claim or settlement
• that you owe nothing if there is no recovery, and never more than your net proceeds

Because the rate of return must appear on the front page, you can compare offers on the same basis. The tax point is covered on is a lawsuit advance taxable, and other options on alternatives to pre-settlement funding.

Cancelling, venue and your lawyer

Section 2253(c)(2) gives you 5 business days after you sign the contract or receive any part of the funds to cancel by giving notice and returning the money. Under 2253(c)(3), if the contract ends up in court, you can choose to have it heard in the Vermont Superior Court for the county where you live. Section 2253(c)(4) requires the contract to include an acknowledgment that you are represented by an attorney and had the opportunity to discuss the contract with that attorney.

Vermont also protects what you and your lawyer share with the funder. Under 2255, communications between your attorney and the company are not discoverable and do not waive the attorney-client privilege or work-product protection. Our page on funding and attorney-client privilege explains why that matters in other states.

What a Vermont funder may not do

Section 2254(a) bars a funding company from:

• paying or accepting referral fees with attorneys, law firms or health care providers and facilities
• advertising false or misleading information
• holding any right to make decisions about your claim or settlement, which “shall remain solely with the consumer and his or her attorney”
• knowingly paying court costs, filing fees or attorney’s fees
• referring you to a specific attorney, law firm or provider
• failing to promptly give you or your attorney copies of the contract
• getting you to waive your remedies, or requiring binding arbitration
• giving you legal advice about the funding or the claim
• assigning the contract to a third party, except to a subsidiary or affiliate or as a security interest where the company keeps collection duties
• reporting you to a credit agency when the net proceeds are not enough to repay it

Under 2254(b), a lawyer or firm you hire may not have a financial interest in the funding company or take a referral fee from it. The credit reporting ban is one reason Vermont’s law matters for people with weak credit; see lawsuit advance with bad credit.

Enforcement and complaints

Under 2259(a), failing to comply with chapter 74 is an unfair or deceptive act in commerce under Vermont’s Consumer Protection Act, 9 V.S.A. chapter 63. The Commissioner’s powers add to the rights consumers and the Attorney General already have, and the Commissioner’s interpretations and rules carry a presumption of validity (2259(b)).

The Commissioner heads the Department of Financial Regulation, and its Banking Division takes consumer complaints. You can file one with the Banking Consumer Complaint Form online, by email to dfr.bnkconsumer@vermont.gov, by mail to Dept. of Financial Regulation, Banking Division, 89 Main Street, Montpelier, VT 05620, or by calling the Banking Division at 802-828-3307 (complaint page). The Department’s toll-free main line is 833-337-4685.

Your deadline to sue in Vermont

An advance does not pause your claim’s deadline. Vermont generally allows three years to sue for “injuries to the person suffered by the act or default of another person,” with the claim treated as accruing on the date the injury is discovered (12 V.S.A. 512(4)). Other periods apply to some claims.

What to ask before you sign

• Is your company licensed by the Vermont Commissioner of Financial Regulation?
• What annual percentage rate of return does the front page show, and how does the total due change over time?
• What would I owe if my net proceeds were smaller than expected?
• Is this the form of disclosure the Commissioner prescribes?
• Will my lawyer get a copy of the signed contract right away?

The state law table compares Vermont 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.