By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.
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How to read the table
Each state falls into one of three groups.
- Statute. The legislature passed a law aimed at consumer legal funding. These laws usually set a cancellation period, require disclosures on the first page of the contract, ban the funder from controlling the case and ban referral fees between funders and lawyers. Many require registration or a license, and a few cap charges.
- Court decision only. There is no funding statute, but an appellate court has ruled on whether these contracts are loans, usurious or champertous (an old doctrine against outsiders paying for someone else’s lawsuit in exchange for a share).
- No specific law found. We found no funding statute and no published appellate decision deciding how a funding company’s contract is treated in the official and court sources we reviewed. A few of these states have an older ruling between private parties, an unpublished decision or a regulator opinion, and the state guides linked in the table explain them. That does not mean funding is unregulated there. General usury limits, consumer protection statutes and champerty rules may still apply, and a court could treat a contract as a loan.
The “What it requires” column is a short summary. Cancellation periods are business days. Laws change, and the statute’s own text controls; the source link goes to the official text or the court decision. For background on what each group means for a consumer, see is pre-settlement funding legal in my state.
Laws that took effect or changed in 2026
- California: the Consumer Legal Funding Act took effect January 1, 2026.
- Georgia: most of SB 69 took effect January 1, 2026.
- Kansas: the Transparency in Consumer Legal Funding Act was approved April 9, 2026 and takes effect on publication in the statute book; it was listed among Kansas laws in effect July 1, 2026 (KCTV5).
- New York: chapter 645 of 2025, signed December 19, 2025, takes effect 180 days after becoming law (S.1104-A), which falls in June 2026. A February 13, 2026 amendment moved the rules into the Financial Services Law; its registration and reporting sections take effect one year after that amendment.
- Utah: HB 280 took effect May 6, 2026 and raised the cancellation period from 5 to 10 business days.
- Vermont: Act 142 amendments to the licensing section took effect July 1, 2026.
- Ohio: the new Revised Code chapter 1357 took effect October 6, 2026; registration with the Attorney General begins 90 days after that date.
- North Carolina: a 2026 law banning “litigation investment” in case fees and costs took effect June 22, 2026, but it excludes money for personal and household expenses that is not used for the case (S.L. 2026-14).
The state table
| State | Law | What it requires | Source |
|---|---|---|---|
| Alabama | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Alaska | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Arizona | No consumer statute | 2025 litigation financing law excludes funding for personal and family use | Laws 2025, ch. 226 |
| Arkansas | Statute: Ark. Code 4-57-109 (2015) | State maximum interest rate applies (17% a year, per GAO); all charges count as interest | Ark. Code 4-57-109; GAO |
| California | Statute: Bus. & Prof. Code 6250-6256 (2026) | No percentage cap; time-based charges only; charges stop at 36 months; cancel 5 days; lawyer acknowledgment; no registration | B&P 6250-6256 |
| Colorado | Court decision: Oasis v. Coffman (2015) | Advances are loans under the consumer credit code | Colo. Sup. Ct. |
| Connecticut | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Delaware | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| District of Columbia | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Florida | No statute | Fausone v. U.S. Claims (2005) remarked these are not treated as loans; usury not decided | Fla. 2d DCA |
| Georgia | Statute: O.C.G.A. 7-10-1 et seq. (2026) | Register with Dept. of Banking and Finance; no rate cap; cancel 5 days | SB 69 |
| Hawaii | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Idaho | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Illinois | Statute: 815 ILCS 121 (2022) | License; fee up to 18% of funded amount per 6 months; charges stop at 42 months; cancel 14 days | 815 ILCS 121 |
| Indiana | Statute: Ind. Code 24-12 | DFI license; fee up to 36% a year; cancel 5 days | DFI advisory |
| Iowa | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Kansas | Statute: 2026 Session Laws ch. 130 | Register with Secretary of State; no numeric cap; cancel 10 days | HB 2518 |
| Kentucky | Court decision: Boling v. Prospect Funding (6th Cir. 2019) | Federal court held agreements void as champerty and usurious under Kentucky law | 6th Cir. |
| Louisiana | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Maine | Statute: 9-A M.R.S. 12-101 to 12-107 (2007) | Register; fees compound no more than every 6 months and stop at 42 months; cancel 5 days | Maine Legislature |
| Maryland | No statute | Attorney General’s consumer division told lawmakers in 2026 it views these products as loans | AG testimony |
| Massachusetts | No statute | Champerty abolished (Saladini v. Righellis, 1997); unfair agreements still reviewable | Mass. SJC |
| Michigan | Court decision: Lawsuit Financial v. Curry (2004) | Advances made after a verdict were usurious loans | Mich. App. |
| Minnesota | Court decision: Maslowski v. Prospect Funding (2020, 2023) | Champerty ban abolished; usury statute does not apply; unconscionability still open | Minn. Sup. Ct. |
| Mississippi | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Missouri | Statute: RSMo 436.550-436.572 (2023) | License; no numeric cap; client must have a lawyer; cancel 10 days | RSMo ch. 436 |
| Montana | Statute: Mont. Code 31-4-101 et seq. (2023) | Register with Secretary of State; funder may not receive over 25% of recovery; cancel 5 days | Mont. Code |
| Nebraska | Statute: Neb. Rev. Stat. 25-3301 to 25-3309 (2010) | Register with Secretary of State; fees stop at 36 months; cancel 5 days; lawyer acknowledgment | Neb. Rev. Stat. 25-3303 |
| Nevada | Statute: NRS 604C (2019) | License; charges up to 40% a year; $500,000 maximum; cancel 5 days | NRS 604C |
| New Hampshire | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| New Jersey | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| New Mexico | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| New York | Statute: L. 2025 ch. 645, amended L. 2026 ch. 11 | Charges up to 25% of gross recovery; $500,000 maximum; cancel 10 days; registration later | A.9442 |
| North Carolina | Court decision: Odell v. Legal Bucks (2008) | Contingent advance is subject to the usury statute | N.C. App. |
| North Dakota | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Ohio | Statute: R.C. 1357.01-1357.10 (2026) | Register with Attorney General; one-time service fee up to 7%; cancel 10 days | R.C. ch. 1357 |
| Oklahoma | Statute: 14A O.S. 3-801 to 3-817 (2013) | License; $50,000 bond; charge cap not confirmed | Dept. of Consumer Credit |
| Oregon | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Pennsylvania | Court decision: WFIC v. LaBarre (2016) | Investor funding of a company’s lawsuit was champertous; not a consumer case | Pa. Super. |
| Rhode Island | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| South Carolina | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| South Dakota | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Tennessee | Statute: Tenn. Code 47-16-101 to 47-16-110 (2014) | Register; annual fee up to 10% plus other charges up to $360 a year per $1,000; 3-year limit; cancel 5 days | Tenn. Code |
| Texas | Court decision: Anglo-Dutch v. Haskell (2006) | Commercial case: contingent funding not a usurious loan; no consumer statute | Tex. App. |
| Utah | Statute: Utah Code 13-57 (2020, amended 2026) | Register with Division of Consumer Protection; no cap; cancel 10 days | HB 280 |
| Vermont | Statute: 8 V.S.A. 2251-2260 (2016) | License; no cap; cancel 5 days | 8 V.S.A. ch. 74 |
| Virginia | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
| Washington | No statute | HB 2255 (2026) did not pass | WSBA |
| West Virginia | Statute: W. Va. Code 46A-6N (2019) | Register; annual fee up to 18% of original amount; no fees after 42 months; cancel 5 days | W. Va. Code |
| Wisconsin | No consumer statute | Agreements paid from case proceeds must be disclosed to other parties | 2017 Act 235 |
| Wyoming | No specific law found | No consumer funding statute; see the state guide for usury, licensing and court rules | – |
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What the court decisions say
Courts do not agree on whether a contract that is repaid only from a recovery is a loan. Colorado’s Supreme Court said yes, because the debt grows with time. Minnesota’s Supreme Court said its usury statute does not reach these deals because repayment is not certain, though a court can still refuse to enforce an unconscionable rate. North Carolina’s Court of Appeals applied the usury statute because the state’s law covers “advances” as well as loans. Michigan’s Court of Appeals called the deals in its case loans because the plaintiff already had a verdict, so the funder took little risk. If you live in one of these states, the is a lawsuit cash advance a loan page explains why the label matters.
California, Texas and Washington
Beverly Law handles injury cases in these three states. California’s 2026 law requires the lawyer’s written acknowledgment, gives a five-day cancellation right and stops charges at 36 months, but it sets no rate cap and does not require funders to register. Texas has no consumer funding statute, and its most cited decision involved investors in a business lawsuit, so Texas consumers rely on general contract and usury law. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Washington has no statute, and the 2026 bill to regulate litigation financing did not pass.
What this means for you
Check your state’s row, then read the statute itself before you sign, since the summary leaves out details such as disclosure formats. If your state has a cancellation period, mark the deadline the day the money arrives; our page on the right to cancel explains how cancellation works. If your state requires the lawyer’s acknowledgment, see does my lawyer have to sign a funding contract. If your state has no cap, the contract’s payoff schedule is the only limit, so compare it against what pre-settlement funding costs. The lawsuit cash advance guide covers the rest.
Common questions
Which states cap what a funder can charge?
In the statutes we reviewed, Arkansas, Illinois, Indiana, Montana, Nevada, New York, Tennessee and West Virginia set a cap on charges, each in a different way. Ohio caps only a one-time service fee. Maine and Nebraska limit compounding and how long fees run but set no rate, and California stops charges at 36 months without a rate cap.
Which state law applies if the funder is in another state?
It depends on the contract and the court. In Boling, the Sixth Circuit applied Kentucky law to Kentucky consumers despite out-of-state choice-of-law clauses.
Does "no specific law found" mean lawsuit funding is illegal in my state?
No. It means we found no funding statute or appellate ruling. Funding may be offered, and general usury and consumer protection law may still apply.
How often is this table updated?
This version reflects laws and decisions we could confirm as of November 2026. Several legislatures consider funding bills every year, so check the source link before relying on a row. Beverly Law does not offer or arrange lawsuit funding and receives no payment from funding companies. Beverly Law offers a free case review in English or Spanish at (310) 552-6959 if you have questions about your injury case. You owe no fees or costs unless we win.
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Related pages
Cash advance on a lawsuit · Injury law FAQs
Sources
- Arkansas Code 4-57-109 (law.justia.com)
- GAO-23-105210 (Arkansas 17% cap as described by GAO) (gao.gov)
- California B&P 6250-6256 (law.justia.com)
- Georgia SB 69 (2025) (gov.georgia.gov)
- Illinois 815 ILCS 121 (ilga.gov)
- Indiana DFI CPAP advisory (secure.in.gov)
- Indiana Code 24-12 (NCOIL copy, used to confirm cancellation period) (ncoil.org)
- Kansas 2026 Session Laws ch. 130 (HB 2518) (kssos.org)
- KCTV5, Kansas laws taking effect July 1, 2026 (kctv5.com)
- Maine 9-A M.R.S. art. 12 (legislature.maine.gov)
- Missouri RSMo ch. 436 (revisor.mo.gov)
- Montana Code 31-4-101 et seq. (mca.legmt.gov)
- Nebraska Rev. Stat. 25-3303 (nebraskalegislature.gov)
- Nevada NRS 604C (leg.state.nv.us)
- New York A.9442 (L. 2026, ch. 11) (nysenate.gov)
- New York S.1104-A (L. 2025, ch. 645) (nysenate.gov)
- Ohio R.C. chapter 1357 (codes.ohio.gov)
- Oklahoma Department of Consumer Credit, consumer litigation funder license (oklahoma.gov)
- Tennessee Code title 47, ch. 16 (law.justia.com)
- Utah HB 280 (2026), enrolled (le.utah.gov)
- Vermont 8 V.S.A. ch. 74 (legislature.vermont.gov)
- West Virginia Code 46A-6N (code.wvlegislature.gov)
- Oasis Legal Finance Group v. Coffman (Colo. 2015) (coloradojudicial.gov)
- Boling v. Prospect Funding Holdings (6th Cir. 2019) (law.justia.com)
- Lawsuit Financial v. Curry (Mich. App. 2004) (law.justia.com)
- Maslowski v. Prospect Funding Partners (Minn. 2023) (law.justia.com)
- Odell v. Legal Bucks (N.C. App. 2008) (cite.case.law)
- North Carolina S.L. 2026-14 (ncleg.gov)
- WFIC, LLC v. LaBarre (Pa. Super. 2016) (law.justia.com)
- Anglo-Dutch Petroleum v. Haskell (Tex. App. 2006) (hallapproved.com)
- Arizona Laws 2025, ch. 226 (azleg.gov)
- Fausone v. U.S. Claims (Fla. 2d DCA 2005) (hallapproved.com)
- Maryland AG Consumer Protection Division testimony on HB 1298 (2026) (mgaleg.maryland.gov)
- Saladini v. Righellis (Mass. 1997) (law.justia.com)
- WSBA, 2026 session recap (HB 2255) (wabarnews.org)
- Wisconsin 2017 Act 235 (docs.legis.wisconsin.gov)
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.