Alabama (AL) Lawsuit Loans

Updated on 7/27/2021

This article helps plaintiffs and attorneys alike learn more about lawsuit loans and alternatives in Alabama. Below you will find the following information:

Lawsuit loan alternatives in Alabama

Lawsuit loans are expensive. In addition to budgeting, plaintiffs in Alabama should exhaust all alternative funding options before seeking legal funding. See below for a list of organizations and resources that can help residents of Alabama pay for living expenses such as rent, utilities, and food while they wait for their case to settle.

  • Emergency Rental Assistance Alabama – helps Alabama residents with rent and utility payments. Alabama residents qualify if their income is below a certain threshold 
  • Alabama Food Bank Association – helps Alabama residents in need find nearby food banks. There are no qualifying criteria.
  • Alabama Food Assistance – food stamps and vouchers for qualifying AL residents. Alabama residents generally qualify if they have a total bank balance under $2,001 or $3,001 in certain circumstances.

Lawsuit funding laws, regulation and relevant ethics opinions in Alabama

Though proposed in the past, there are no statutes governing lawsuit loan agreements in Alabama. Case law seems to question the enforceability of lawsuit lending agreements. The Alabama state bar allows attorneys to guarantee loans from third parties on behalf of a client in the event of a financial emergency. Some funding companies do provide loans in the state but many do not.

Laws regarding lawsuit loans in Alabama

AL SB261 (2017) sought to regulate consumer lawsuit lending in the state and establish a maximum finance charge. The bill did not pass. At present, Alabama does not regulate the pre-settlement lawsuit lending industry.
Source: AL SB261 (2017)

Legal funding case law in Alabama

Wilson v. Harris – Harris entered into a litigation funding contract with Wilson. Harris received around $4,000 in exchange for a percentage stake in her lawsuit. The Court of Civil Appeals of Alabama ruled that litigation funding contracts such as this one were against public policy and not in the public’s best interest. They did not say the agreement was illegal and did not indicate that such agreements were strictly champertous. The decision was likely due to the extremely high effective return. Today, most pre-settlement funding contracts accrue interest like a loan as opposed to securing a percent stake in the proceeds from a lawsuit.
Source: Wilson v. Harris

Can a lawyer lend money to a client in Alabama?

The Alabama Bar Association allows lawyers to lend to clients for true financial emergencies with some restrictions. The loan must be repaid regardless of the outcome of the case. Loans may not be used as a marketing tactic to secure clients.
Source: Alabama Rules of Professional Conduct Rule 1.8(e)

Can attorneys help clients receive lawsuit loans in Alabama?

The Alabama Bar allows lawyers to participate in loan agreements for a plaintiff’s true financial emergency. Typical pre-settlement funding is technically not structured as a traditional loan, meaning they could be arguably exempt from even this limitation.
Source: Alabama Rules of Professional Conduct Rule 1.8(e)

Lawsuit loan companies serving Alabama

Recommended lawsuit loan companies funding Alabama residents

US Claims Logo

US Claims offers some of the lowest, non-compounding rates in the industry. Many companies claim to offer “the lowest rates in the industry” – we recommend comparing them against an offer from US Claims. to see for yourself.

View US Claims’ profile

Thrivest Link Legal Funding Logo

Thrivest Link Legal Funding offers fair terms with a fast, efficient funding process. Many companies claim to offer same-day or 24-hour lawsuit loans but Thrivest Link Legal Funding often actually makes it happen.

View Thrivest Link Legal Funding’s profile

Lawsuit loan companies located in Alabama

Compare Lawsuit Loans does not currently cover any local lawsuit lending companies in Alabama. Local funding companies interested in being included on this page may contact us at [email protected]

Other pre-settlement lawsuit loan companies serving Alabama residents