Yes, pre-settlement funding qualifications vary by state. Since there are no federal laws regulating pre-settlement funding, each state sets its own rules regarding eligibility, required documentation, funding limits, and borrower protections. Some states strictly regulate legal funding, while others allow for more flexibility.
In this article, we’ll explore why these differences exist, how they impact your ability to access funding, and which states have specific regulations you should be aware of.
Why Do Pre-Settlement Funding Rules Vary?
Because pre-settlement lawsuit funding is not governed by federal law, states create their own regulations to protect plaintiffs and ensure transparency. Some states impose interest rate caps, restrictions on case types, or specific disclosure requirements for funding companies. Others allow more lenient terms, providing greater flexibility for plaintiffs in need of financial relief.
Common state-specific legal funding regulations include:
- Documentation requirements – Some states require additional paperwork before funding approval.
- Funding limits – Certain states cap the amount of funding a plaintiff can receive.
- Case type restrictions – Some states exclude funding for specific lawsuits, such as medical malpractice or workers’ compensation claims.
Understanding how pre-settlement funding works is key to knowing your eligibility and how quickly you can receive funds based on your state’s regulations.
Examples of States That Regulate Pre-Settlement Advances
Each state has different rules for pre-settlement funding. Here are a few notable examples:
- North Carolina – Limits the fees legal funding companies can charge to protect consumers.
- Ohio – Provides a five-day window for plaintiffs to cancel their funding agreements without penalties.
- Oklahoma – Requires funding companies to register and disclose all terms before finalizing agreements.
- Colorado – Only cases expected to yield substantial settlements qualify due to the $75,000 minimum funding threshold.
- Montana – Caps the total repayment amount and limits interest rates to 25%.
- Mississippi – Restricts funding only to specific case types, such as personal injury, wrongful death, and select commercial disputes.
Because these laws change over time, it’s important to work with a provider who understands the state-specific legal landscape. If you’re considering pre-settlement lawsuit funding, knowing your state’s regulations will help you make an informed decision.
Get Financial Relief with Mustang Funding
No matter where your case is being handled, Mustang Funding makes the pre-settlement funding process simple and efficient. Our team works closely with plaintiffs and their attorneys to navigate state-specific regulations and provide fast funding—often within 24 hours of approval.
For a deeper understanding of pre-settlement funding, check out our ultimate guide to pre-settlement funding. If you have questions about your eligibility or how your state’s laws impact your options, contact Mustang Funding today or submit an application to get started.
About Mustang Funding
Mustang Funding, founded in 2018 and based in Wayzata, MN, is a litigation finance company dedicated to empowering individuals and law firms nationwide with transparent and innovative financial solutions. With over $170 million funded, 10,000+ checks issued, and more than 3,000 cases financed, Mustang provides plaintiff pre-settlement funding, law firm financing, and commercial funding to meet diverse client needs. Their commitment to transparency, integrity, and expertise sets them apart, offering tailored financial support to plaintiffs, businesses, and legal professionals. By bridging capital gaps and fostering access to justice, Mustang Funding continues to lead the legal asset investment industry with a strategic, inclusive, and forward-thinking approach.
