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

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

Hawaii’s 12 percent limit on consumer credit

Chapter 478 of the Hawaii Revised Statutes is the state’s usury law. Section 478-4(a) says it is not unlawful, “with respect to any consumer credit transaction (except a credit card agreement) and any home business loan,” to agree in writing to “any rate of simple interest not exceeding one per cent per month or twelve per cent a year.” Subsection (b) allows a finance charge with an annual percentage rate up to 12 percent instead, plus charges that the federal Truth in Lending Act leaves out of the finance charge (HRS 478-4).

Two groups get different treatment:

• A creditor that is a financial institution regulated under chapter 412, other than trust companies and credit unions, may charge up to two percent a month, or 24 percent a year.
• Under subsection (d), the 12 percent limits do not apply to credit extended under articles 9 and 10 of chapter 412 or chapter 476, or to installment loans regulated under chapter 480J.

Charging more than the law allows can be a crime. Under HRS 478-6, a violator “shall be guilty of usury” and may be fined up to $250 or jailed up to one year, or both.

Does the limit reach a lawsuit advance?

That turns on whether a nonrecourse advance is a “consumer credit transaction.” A funder may argue it is not, because you owe nothing if you lose. Some courts in other states have looked past that label and others have accepted it; is a lawsuit cash advance a loan walks through both sides. We found no Hawaii appellate decision and no published statement from the Hawaii Division of Financial Institutions or the Office of Consumer Protection on the question.

The federal disclosure question is separate, and does Truth in Lending apply to lawsuit funding covers it.

Example only: comparing a payoff with the 12 percent figure

Example only, with round hypothetical numbers. Suppose you receive $5,000 and your case resolves in two years. Twelve percent simple interest on $5,000 for two years is $1,200, for a total of $6,200. If a contract asks for $9,000 at that point, the extra $2,800 is the gap between the contract and the statute’s figure. That comparison does not tell you the contract is illegal, because no Hawaii court has applied section 478-4 to these advances. It does tell you how to read the price, and it gives you a concrete question for your lawyer. The terms of your own contract decide what you owe.

Champerty in Hawaii

We found no Hawaii appellate decision applying champerty or maintenance to a consumer lawsuit advance, and no Hawaii statute on the subject. We also did not verify any Hawaii bill on consumer lawsuit funding. Our laws by state table will change if that does.

What a Hawaii lawyer can pay for

Hawai’i Rule of Professional Conduct 1.8(e) says a lawyer “shall not provide financial assistance to a client in connection with pending or contemplated litigation,” except that a lawyer may advance court costs and litigation expenses, “the repayment of which may be contingent on the outcome of the matter,” and may pay those costs for an indigent client. Comment 10 gives the reason lawyers cannot fund living expenses: it “would encourage clients to pursue lawsuits that might not otherwise be brought” and “gives lawyers too great a financial stake in the litigation” (Hawai’i Rules of Professional Conduct).

Your filing deadline in Hawaii

Under HRS 657-7, “actions for the recovery of compensation for damage or injury to persons or property shall be instituted within two years after the cause of action accrued,” except as section 657-13 provides. Claims against the state or counties, and some other claims, follow other rules. An advance does not pause your deadline, and what happens if you lose your case explains what happens to a nonrecourse advance when the case is lost.

What to ask before you sign

• What will you owe at 6, 12, 24 and 36 months, and how does each figure compare with 12 percent simple interest on the amount you receive?
• Does the company say it is licensed or regulated under any Hawaii chapter, and which one?
• Which state’s law does the contract choose, and where must disputes be heard?
• What happens to the balance if your case settles for less than expected?

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.