Utah Lawsuit Loans: Costs, Protections, and Risks

A lawsuit loan in Utah is a non-recourse cash advance a plaintiff can take against a pending injury or similar case, repaid only from the settlement or verdict if the case wins and forgiven entirely if it loses. State law calls these arrangements “maintenance funding agreements,” and they are governed by the Utah Maintenance Funding Practices Act, which was significantly strengthened by amendments that took effect May 6, 2026.¹ The rules now require providers to register with the state, give you 10 business days to cancel, and bar funders from steering your case.

How the Advance Works

Despite the label, a lawsuit loan is not a traditional loan. Utah’s statute defines a consumer maintenance funding agreement as a “non-recourse transaction in which a consumer maintenance funding provider purchases contingent rights to receive an amount of the potential proceeds of a settlement, judgment, award, or verdict.”² Because repayment depends entirely on the outcome of the case, these agreements are generally not treated as loans subject to traditional lending rules or usury caps.³

Approval hinges on the strength of the legal claim, not on your credit score, employment, or personal finances.⁴ After you apply, the funding company contacts your attorney to review liability evidence, medical records, insurance information, and settlement estimates. If approved, you typically receive between 10% and 20% of the case’s estimated value, often within 24 to 48 hours.⁵

You make no monthly payments while the case is pending. When the case resolves, your attorney pays the funding company directly from the settlement proceeds before disbursing the rest to you. If the case produces no recovery, the funding company absorbs the loss and cannot pursue your other assets or income.⁶

What It Costs

The non-recourse structure shifts risk to the funder, and pricing reflects that. Interest rates on consumer pre-settlement advances typically run from 24% to 60% per year, and higher rates have been reported.⁷ Because cases can take years, and interest keeps accruing the whole time, the total repayment can grow substantially.

Compounding is where the cost curve gets steep. A $10,000 advance at 3% monthly compound interest reaches roughly $14,259 after one year and over $20,000 after two. The same advance under simple interest would sit at about $13,600 at one year and $17,200 at two. Providers may also add origination, underwriting, processing, or case-management fees on top of the interest.⁷

Utah does not cap the interest rate on these agreements. The state’s general interest statute lets parties agree to “any rate of interest” by contract, with a default legal rate of 10% per annum when no rate is specified.⁸ What Utah does require is transparency. Every agreement must include an itemization of all one-time charges and a payment schedule showing the total amount owed at the end of each six-month period, along with a clear statement that no fees beyond those disclosed can be charged.⁹

Your Protections Under Utah Law

The Maintenance Funding Practices Act, updated by H.B. 280 effective May 6, 2026, gives Utah plaintiffs several specific rights.¹

Registration You Can Check

Every consumer maintenance funding provider must register with the Utah Division of Consumer Protection before doing business in the state. Registrations run one year, and providers must file annual reports on the number of agreements, dollar amounts funded, and profits realized.¹⁰ If a provider approaching you is not registered, that is a signal to stop.

Ten Business Days to Cancel

You can rescind the agreement without penalty within 10 business days of signing, so long as you return the full disbursed amount. That window was extended from five days by the 2026 amendments.¹

No Percentage-of-Recovery Charges

A funding agreement cannot require you to pay an amount calculated as a percentage of your total settlement recovery. Charges must be defined in the contract and are payable only from the available proceeds after all liens, fees, and costs are settled. If there are no proceeds, you owe nothing.⁹

No Prepayment Penalty, No Waiver of Rights

Providers cannot charge you for paying off the advance early, and they cannot ask you to waive your right to a jury trial or other legal rights as a condition of funding.¹¹

The Funder Cannot Run Your Case

A provider cannot try to influence decisions about the conduct, settlement, or resolution of the underlying lawsuit. You and your attorney retain full control over litigation strategy. Providers also cannot pay or accept referral fees or commissions with attorneys or healthcare providers, cannot refer you to specific lawyers or doctors (beyond bar association referral services), cannot fund a case where your lawyer or firm has a financial interest in the funding company, and cannot use the advance to pay court costs, filing fees, or attorney fees.¹¹ A willful violation of these rules renders the agreement unenforceable.¹

Which Cases Qualify

Funding companies generally advance money on personal injury and similar tort claims where a monetary recovery is realistic. Common case types include car accidents, slip-and-fall injuries, medical malpractice, wrongful death, workers’ compensation, product liability, and employment discrimination claims.⁵ You need an active claim and you must be represented by an attorney.⁴

After you submit basic case details, the company’s underwriters contact your attorney to evaluate the strength of the claim and the expected recovery. If it clears underwriting, the company sends an offer with the advance amount, fees, and terms for you and your attorney to review. Approval typically takes 24 hours to one week, and funds go directly to you once contracts are signed.³

Your Attorney’s Role

Your lawyer is involved at every step. They supply the documentation the funding company needs to underwrite the case and review the agreement’s terms before you sign. Utah law requires providers to file a template of their agreement with the Division of Consumer Protection and to give you a copy of the executed agreement, so your attorney has a paper trail to check the terms against.¹¹

Utah’s professional conduct rules reinforce this. Under SCRP Rule 3-5.4, your lawyer must ensure that no third party, including a funder, interferes with the lawyer’s independent professional judgment or duty of loyalty to you.¹²

When the case resolves, your attorney pays the funding company directly from the settlement proceeds before distributing what is left to you.⁴ Utah law places attorney liens and statutory liens such as Medicare ahead of the funding provider’s claim on the proceeds, so those come out first.¹

Risks to Weigh Before Signing

Non-recourse structure removes personal liability if the case fails, but it does not make the advance cheap. With annual rates commonly above 24% and interest compounding over multi-year cases, the total repayment can consume a large share of any eventual settlement. One industry illustration shows a $25,000 advance at 3% monthly compound interest with a 40% success fee growing to more than $65,000 after 18 months, an effective cost of 160% of the principal. Because you cannot predict exactly how long the case will run, you cannot lock in the final price at signing.

Two habits reduce the surprise. Read the six-month payment schedule the provider is required to give you, and trace the balance to the outer edge of how long your case might realistically take. Then use the 10-business-day cancellation window if the numbers look worse on paper than they sounded in the pitch.⁹¹

Also read for control clauses. Utah law now bars funders from influencing litigation decisions or settlements, but contracts still vary, and consumer advocates recommend confirming the agreement states plainly that the lender has no control over the disposition of the case.³ In Utah that protection is written into the statute, but the language should also appear in the paper you sign.

1
Utah Legislature. H.B. 280, Third Party Litigation Funding Amendments
2
Utah Legislature. Maintenance Funding Practices Act, Section 13-57-102
3
Annuity.org. Pre-Settlement Funding
4
High Rise Legal Funding. Pre-Settlement Funding
5
Gain Servicing. Guaranteed Pre-Settlement Funding
6
US Claims. Non-Recourse Loan
7
Enjuris. Lawsuit Loan Actual Cost
8
Utah Legislature. Utah Code Section 15-1-1
9
FindLaw. Utah Code Section 13-57-301
10
Utah Legislature. Maintenance Funding Practices Act, Section 13-57-201
11
Utah Legislature. Maintenance Funding Practices Act, Section 13-57-202
12
Utah Courts. SCRP Rule 3-5.4, Professional Independence of a Lawyer