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

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

The Boling case, step by step

Boling was a Kentucky resident hurt in Kentucky who sued Blitz USA. While that case was pending he signed four funding agreements between 2009 and 2013, two for $5,000 and two for $10,000. The Sixth Circuit’s opinion says the agreements “accrued interest at the rate of 4.99% per month,” which the district court found was an effective annual rate of 79.38 percent (Boling, No. 18-5599).

His injury case resolved in May 2014. In August 2014 the funder sent a schedule claiming about $340,405. By March 2017, the balance it claimed had grown to about $1.5 million.

Boling sued in federal court in Kentucky in June 2014, asking the court to declare the agreements void. The funder sued in New Jersey to force arbitration, and that case was transferred to Kentucky. The district court granted Boling summary judgment, predicting that Kentucky’s highest court would find the agreements in violation of the state’s champerty statute and public policy, and finding that their rate exceeded the usury limit. It then entered judgment for the funder on unjust enrichment and promissory estoppel for $34,625, which the Sixth Circuit described as the principal plus costs: $30,000 of principal and $4,625 in fees. Boling did not appeal that award. On April 25, 2019, the Sixth Circuit affirmed.

So the client in Boling did not walk away owing nothing. He owed back what he received plus fees, and the funder lost its claim to the much larger contract balance.

Champerty: KRS 372.060

Kentucky has a champerty statute. KRS 372.060 says that any contract made “in consideration of services to be rendered in the prosecution or defense, or aiding in the prosecution or defense,” of a suit by someone who is not a party, under which “the thing sued for or in controversy or any part thereof, is to be taken, paid or received for such services or assistance, is void.”

The Sixth Circuit predicted that the Kentucky Supreme Court would find the funding agreements void under that statute. It treated the money as “assistance” in the prosecution of the suit, given in exchange for part of the recovery. It also noted that Kentucky courts treat champerty as a doctrine that “remains viable only as a defense in contract actions.” That fits how Boling used it: he raised it to stop the funder from collecting.

Usury: KRS 360.010 and 360.020

Kentucky’s usury statute sets a legal rate of 8 percent a year, but parties may agree in writing to more within limits. For a written obligation with an original principal of $15,000 or less, the rate may not exceed 4 percent above the Federal Reserve discount rate on 90-day commercial paper “or nineteen percent (19%), whichever is less” (KRS 360.010(1)(a)). Above $15,000, any agreed rate is allowed.

The funder argued its agreements were not loans because repayment depended on the case. The Sixth Circuit answered that the statute covers “money due or to become due upon any contract or other obligation in writing,” and refused to stretch a Kentucky case about profits from a shared business into protection for these deals, because the parties “were not engaged in a commercial enterprise.”

If a lender knowingly charges more than KRS 360.010 allows, KRS 360.020 treats it as “a forfeiture of the entire interest,” and a borrower who already paid the excess may recover “twice the amount of the interest thus paid.” That claim must be brought “within two (2) years from the time the usurious transaction occurred.”

The limits of Boling

• It is a federal decision marked “not recommended for publication.” It predicts Kentucky law but does not bind Kentucky state courts, and we did not find a Kentucky Supreme Court decision on consumer funding contracts.
• Its choice-of-law holding matters. The contracts picked New Jersey, New York and Minnesota law, yet the court applied Kentucky’s “most significant relationship” test because Boling lived, was hurt and sued in Kentucky.
• The facts were extreme. Each case turns on its own contract, rate and timing.

Kentucky regulators and bills

We did not find a published position from the Kentucky Attorney General or the Department of Financial Institutions on consumer lawsuit advances, and we did not verify any pending Kentucky bill on the subject. Our laws by state table is updated when that changes.

Your filing deadline in Kentucky

Kentucky’s deadline for many injury claims is short. Under KRS 413.140(1)(a), an action “for an injury to the person of the plaintiff” must be filed within one year after it accrues. Some claims follow other deadlines, so ask a lawyer about your own deadline right away. An advance does not extend it.

What to ask before you sign

• Does the contract say which state’s law applies? Under Boling, a Kentucky court may apply Kentucky law anyway.
• What is the annual rate once all fees are counted, and how does it compare with the KRS 360.010 limit for an amount of $15,000 or less?
• What happens if a court finds the contract void? Boling suggests you could still owe back the money you received.
• Is there another way to cover the gap? See alternatives to pre-settlement funding 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.