Yes, there can be. While litigation or pre-settlement funding is widely available and commonly used, some states have regulations that may affect how it can be used, disclosed, or structured. These laws are evolving and can vary depending on where your case is filed. That’s why it’s important to understand the legal landscape and work closely with your attorney before entering into a funding agreement.
Litigation funding is non-recourse, which means that if the case does not settle or the verdict is not in your favor, the money does not have to be repaid. Because the funding company assumes the risk, every application is evaluated thoroughly in consultation with your attorney.
Examples of State Regulations
As of July 2025, seven states, Indiana, Kansas, Louisiana, Montana, Oklahoma, West Virginia, and Wisconsin, have passed laws regulating litigation funding, and the rules vary widely.
Some states, like Montana, have strict regulations: they limit how much a funder can take from a settlement, require automatic disclosure of funding agreements, and ban funders from making legal decisions or giving legal advice.
Others, like Oklahoma and Wisconsin, are more limited, only requiring that funding details be shared during discovery if requested. Some states also require parties to say whether a funder has control over key decisions, like settling the case.
In Colorado, the minimum amount you can receive in pre-settlement funding is $75,000. That means the total expected value of your settlement, before attorney fees, medical liens, and other case-related costs, must be high enough to support that amount.
Since funding companies typically advance 10–20% of the projected settlement, your case would need to be valued at $375,000 to $750,000 or more to qualify for the minimum funding threshold.
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What Types of Cases Qualify for Pre-Settlement Funding?
While a few states have specific regulations, pre-settlement funding is available in most U.S. states and is most commonly offered for personal injury claims. Some states also allow funding for workers’ compensation or other civil lawsuits, though eligibility can vary.
At Mustang Funding, we offer funding for all types of civil lawsuits and personal injury cases, including workplace discrimination, civil rights, car accidents, premises liability, wrongful death, product liability, and many more.
To determine if your case qualifies, consult your attorney and speak with your funding provider, who can explain any restrictions based on your location and case type.
“At Mustang Funding, our commitment to ethical lending practices and compliance with state regulations means that we are constantly monitoring changes in legislation.”
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If you have a pending personal injury case and legal representation and want to know if funding is right for you, learn more from our ultimate guide to pre-settlement funding. Our team of experts has a combined 100+ years of experience in the finance industry and 50+ years in litigation finance. Contact us if you have questions; our team members are always within reach and ready to talk.
