Alabama (AL) Lawsuit Loans

Updated on 6/4/24

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 companies serving Alabama

Below you will find a list of companies that provide funding in Alabama. We highlight lawsuit loan companies we recommend, as well as local and regional funding companies where applicable.

Recommended lawsuit loan companies funding Alabama residents

We recommend the following companies for plaintiffs residing in Alabama.

Our pick for low rate lawsuit loans

USClaims 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 USClaims to see for yourself.

View USClaims’ profile

Our pick for fast lawsuit settlement loans

Thrivest Link Legal Funding offers reasonable funding terms often with simple, non-compounding rates. Their expert underwriting allows them to fund larger sums than many of their competitors. They frequently approve claims for funding within 24 hours.

View Thrivest Link Legal Funding’s profile

See our full list of recommended companies here.

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 questions 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 alternatives in Alabama

Lawsuit loans are expensive. Plaintiffs in Alabama should exhaust all other options before seeking legal funding. Check out the local resources below for some ideas:

  • 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.