New York Lawsuit Loans
A New York lawsuit advance is a contingent, non-recourse cash advance, now governed by the 2026 Consumer Litigation Funding Act. Choosing the wrong funder can cost you most of your recovery.
When you need a New York lawsuit loan company that you can trust, choose Direct Legal Funding.
Key Things to Know About New York Lawsuit Loans
Here’s what you should know if you’re considering a New York lawsuit loan:
01
Not a loan. Direct Legal Funding non-recourse cash advances are not loans. Repayment is contingent on your case compensation.
02
Non-recourse. You keep the funds advanced, no matter what – even if you lose.
03
Repayment caps. A 2026 New York law caps the total repayment at the amount advanced plus 25% of gross recovery.
04
Funds paid when you win. Funds are collected when you receive compensation.
05
Attorney involvement. Your attorney verifies your case.
06
You control your case. The funding company doesn’t direct your litigation or your settlement. You stay in control of your case.
07
Take what you need. Choose the amount that’s right for you. A smaller advance now and another later may save on the total amount.
“You have a lawsuit. They’re offering $100,000, but you think your case is worth a million. So you get funding, which gives your attorney more time to work the case. Now, you don’t have to take the unfair settlement offer.”
— Daniel Costanzo, Founder, Direct Legal Funding
WE’RE LOCAL
We’re from New York. Choose local.
When you choose Direct Legal Funding, you’re choosing a New York-based company. You don’t talk to someone in a call center in another state, who doesn’t know how things really work in New York. You’ll work with local professionals. We’ve been a trusted leader in New York lawsuit funding since 2009.
What Is a Lawsuit Loan? – Hint: It’s Really a Non-Recourse Cash Advance
A lawsuit loan is funds paid to a plaintiff who has a pending legal claim. The funds are paid by a funding company, not the defendant in the case. The amount paid is based on what the plaintiff expects to receive in compensation from the lawsuit.
The plaintiff who receives the funds may spend them however they choose.
Lawsuit loans are not really loans because repayment is contingent on the plaintiff winning their case.
“A cash advance levels the playing field. The insurance company has money to drag it out, and the legal system drags it out. But the client has nothing. Instead of having to settle quickly because they need compensation, they can pursue the case to its full value.”
— Daniel Costanzo, Founder, Direct Legal Funding
What does it mean that it’s non-recourse?
Non-recourse means that the right to repayment runs to the case, not to the plaintiff personally. If the plaintiff loses the case, they owe nothing. They don’t even have to pay back the advanced funds. If that happens, the funder just loses the money.
Are Lawsuit Loans Legal in New York? Is It Even a Loan?
Yes. Lawsuit loans are legal in New York. In fact, New York Law says that they’re not loans at all.
Why aren’t they loans?
Under New York law, loans require repayment, no matter what. Several court cases have affirmed this: LG Funding, LLC v. United Senior Properties of Olathe, LLC, 122 N.Y.S.3d 309 (2020). Fast Trak Investment Co., LLC v. Sax, No. 18-17270 (9th Cir. 2020).
The question is whether the funder gets repaid in all circumstances. If the answer is yes, it’s a loan. If the answer is no, it’s not a loan.
Because lawsuit cash advances aren’t loans, state usury laws that cap interest rates don’t apply. See Seidel v. 18 E. 17th St. Owners Inc., 79 N.Y.2d 735 (1992), General Obligations Law § 5-501, Banking Law § 14-a, Penal Law § 190.40. See also Cash4Cases, Inc. v. Brunetti, 167 A.D.3d 448 (1st Dep’t 2018).
At Direct Legal Funding, we want to be a lawsuit funding company that you can trust. We take the law, industry regulations and our ethical obligations seriously.
At Direct Legal Funding, we want to be a lawsuit funding company that you can trust. We take the law, industry regulations and our ethical obligations seriously.
The New York Consumer Litigation Funding Act – What Changed in 2026
“The new law is really good for clients. We’re proud to do business in New York.”
— Daniel Costanzo, Founder, Direct Legal Funding
The New York Consumer Litigation Funding Act goes into effect June 17, 2026. It means new regulations for lawsuit funding. Highlights of the new law include:
01
Interest caps. Capped at the amount advanced plus 25%.
02
Registration. Funding companies must register to operate in New York. This allows for better oversight.
03
Clear terms. Interest rates must be in the contract in bold and all caps.
04
No prepayment penalty. No penalties if you repay in advance.
05
Right to cancel. The consumer has 10 days to cancel the contract, without penalty.
06
Independence. Funders can’t pay legal fees, steer clients to certain attorneys or influence case management. Funders can’t accept or pay referral fees.
These are good things for the consumer.
Daniel Costanzo notes that no prepayment penalty has always been standard operating procedure at Direct Legal Funding:
“You have a lawsuit. They’re offering $100,000, but you think your case is worth a million. So you get funding, which gives your attorney more time to work the case. Now, you don’t have to take the unfair settlement offer.”
— Daniel Costanzo, Founder, Direct Legal Funding
NY Consumer Litigation Funding Act, SB S1104.A, full text.
How Much Does a New York Lawsuit Loan Cost?
It varies from case to case. The best thing to do is to read your agreement.
But here’s how the NY cap works in practice.
Say your funder advances you $20,000. Later, you recover $100,000. The maximum the funder can collect is the amount advanced plus 25% of the gross recovery.
$20,000 + ($100 × 25%) = $45,000.
In this scenario, you would get $20,000 and pay back $45,000 from the case proceeds.
If the recovery is smaller, the cap is smaller, because it’s a percentage.
“Don’t take more money than you need. If you get $10,000 now but you don’t need the other $5,000 for another six months, wait six months and get it. Otherwise, you’re paying interest on $10,000 the whole time.”
— Daniel Costanzo, Founder, Direct Legal Funding
How New York Lawsuit Loans Work, Step by Step
01
Application
The person applies to Direct Legal Funding for a lawsuit loan. Call us or apply online.
02
Attorney Verification
With your permission, we contact your attorney. They tell us about the case.
03
Underwriting
Our underwriters approve or deny. If approved, they set a dollar amount.
04
Offer
We give you the offer details.
05
Sign.
You and your attorney sign the paperwork.
06
Funds
We put the funds in your account.
07
Repayment
At the end of your case, your award pays the amounts due, according to the agreement.
How does lawsuit loan pricing work?
Direct Legal Funding uses a pricing schedule, rather than a fixed fee. That’s because our risk and investment grow the longer the case takes. Usually, we use six-month increments to show what you would owe if the case resolves in that window.
“If you’re comparing offers, look at the payback table. Check whether it’s compounding or simple interest. Check whether the amount caps at a certain point and what the cap is.”
— Daniel Costanzo, Founder, Direct Legal Funding
How Direct Legal Funding evaluates a New York case
We look to advance a conservative share of your expected recovery.
The biggest variable in underwriting an advance is liability. If liability is easy to establish, the advance is easier to approve.
Funding also depends on insurance policy limits. $25,000 is the minimum vehicle coverage in New York. Initially, we advanced about $2,500. Then, once discovery reveals more insurance, like a commercial policy or rideshare insurance, we can do a lot more.
We look for why to fund, not why not. At Direct Legal Funding, when we’re considering New York lawsuit loans, we go deep into cases to look for funding opportunities – cases other companies might not touch
“We look to keep funding our clients as the case progresses, so they can continue to use our company.”
— Daniel Costanzo, Founder, Direct Legal Funding
What New York Cases Qualify for Pre-Settlement Funding
Direct Legal Funding funds personal injury, car accident and civil compensation claims. What makes a case fundable depends on New York law. Some cases are stronger in New York than they are elsewhere.
Car Accidents
We fund a wide range of auto accident cases including car accidents, truck accidents, motorcycle crashes, pedestrian injuries, bicycle collisions and more. We fund single-vehicle and multiple-vehicle accidents.
“New York’s required no-fault insurance can really help car accident victims. Generally, the no-fault benefit covers medical bills, so they don’t come out of the settlement. In other states, medicals get paid back out of the settlement. In New York, it’s better for the client.”
— Daniel Costanzo, Founder, Direct Legal Funding
Serious Injury Cases
We fund claims that fall under New York Insurance Law § 5102(d), where the victim has suffered a serious injury. These are cases that result in death or serious injury like permanent impairment, loss of bodily function, fracture or dismemberment.
“If it’s only physical therapy — it might not make a threshold. And if it doesn’t make the threshold, there’s no pain and suffering.”
— Daniel Costanzo, Founder, Direct Legal Funding
Construction and Labor Law
New York Labor Laws § 240 and § 241 make property owners and general contractors liable for most construction slip and falls. The laws make it easier for injured workers to prove fault and get their compensation.
“Construction accidents that fall under the New York Labor Law are high-value cases. Liability is easy to prove. These cases involve serious injuries, and clients need extensive funding.”
— Daniel Costanzo, Founder, Direct Legal Funding
Medical Malpractice
Get funding for your medical malpractice claim, including objects left in the body, misdiagnosis, delayed diagnosis, medical error, medical injury and facility negligence.
New York laws are good for medical malpractice victims. You don’t necessarily need an expert report to get funded. You just need a certificate of merit. New York law allows good cases to get filed, so funding is easier, earlier in the case.
— Daniel Costanzo, Founder, Direct Legal Funding
Civil Rights, Police Misconduct
Civil rights and police misconduct claims can be strong cases because they are brought against government agencies. New York juries tend to be sympathetic to victims.
“NYPD cases are great in New York.”
— Daniel Costanzo, Founder, Direct Legal Funding
Premises Liability, Sidewalk Injuries
Some slip and fall claims qualify for lawsuit funding. Ask us for more information.
FELA, wrongful death, employment, civil rights
Funding may be available for a wide variety of employment and civil rights claims, including the Federal Employers’ Liability Act for railroad employees, employment claims and civil rights violations.
A note about qualifying
To qualify for pre-settlement funding, you must have an active lawsuit in New York.
“The more popular it gets, the more people are trying to get money before they even have a lawsuit.”
— Daniel Costanzo, Founder, Direct Legal Funding
New York Lawsuit Loans is not for cases that don’t exist yet. You must have an attorney, and the attorney must have filed your case in court. Our friendly representatives will verify your eligibility as part of the approval process.
Why New York Cases Take So Long – and How Funding Bridges the Gap
According to Daniel Costanzo, Founder of Direct Legal Funding, it’s not the legal venue that determines how long a case takes. Usually, it’s the case type. Serious cases with big insurance companies tend to be slower. That’s why they may need the most funding.
Costanzo notes one memorable case, where the client was hurt in a trucking accident. They had costly expenses after the accident, and went into debt about $168,000.
But because of lawsuit funding, the client could wait. They could pursue their case in full to get the result they fully deserved. In the end it opened the client up to potentially claiming another million dollars in compensation.
Lawsuit Loan vs. Bank Loans
A bank loan comes with:
- Credit Checks
- Fixed Monthly Payments
- Repayment, No Matter What
When you choose a cash advance through Direct Legal Funding, there’s none of that. There is no repayment obligation if the case fails.
The trade-off is that an advance costs more than conventional credit. That’s because the funder is taking on the risk. But New York law caps the amount of interest, so you’ll know the exact terms.
It’s true that advance funding costs more than bank loans. That’s because the funder loses the money if the case fails. The price includes that risk. The way to control the cost is to take only what you need as the case progresses. With an advance, rather than a bank loan, you won’t be left to refinance elsewhere at a premium.
Lawsuit Loan Buyouts and Refinancing in New York
A lawsuit loan buyout can get you out of another company’s high-rate advance. Direct Legal Funding does these regularly. We pay off the existing advance and replace it with a new contract.
These are most helpful when you have an uncapped, compounding interest rate – the exact kind the New York law is meant to stop.
“We get people out of more expensive contracts and put in a cap that the other company didn’t have. Sometimes, we can negotiate down the amount they owe, so we can advance the client more.”
— Daniel Costanzo, Founder, Direct Legal Funding
Buyouts make sense when you’re moving off a high-interest rate. Moving off an already-low rate to a higher rate doesn’t benefit the client. If the new contract has a better cap and structure, or a negotiated reduction of the prior balance, it can benefit the client.
Contact Direct Legal Funding to discuss lawsuit loan buyout options in New York.
Mistakes to Avoid When Getting a Lawsuit Loan in New York
Avoid these mistakes when it comes to your New York lawsuit loan.
Thinking it’s "free money."
There is interest, and there are fees.
Taking more than you need.
We counsel clients to take only what they need
Compound interest.
Uncapped compounding charges can balloon in a long case.
No payback table.
The payback table should show what you would owe if the case resolves in each window.
No cap.
As of 2026, every New York lawsuit funding advance should have a cap of no more than the amount funded plus 25% of gross recovery.
Pressure.
Be wary of pressure to sign immediately. Take time to understand the terms.
Unclear contracts.
The contract should be in plain language.
No cancellation option.
The contract should have a 10-day cancellation window.
Not informing your lawyer.
Funding works through your lawyer. Tell them early. It’s okay to ask if they’re lawsuit-funding friendly before you hire them.
How to Apply for a New York Lawsuit Loan
Here’s what you need:
Basic information. About your injury and legal claim.
Attorney information. We’ll contact your attorney.
Apply. Call or apply online.
What you don’t need:
Good credit. We don’t do credit checks.
A job. Pay stubs are not required.
Telling your attorney about the loan and getting the right contact person at the law firm can make funding a lot faster.
“I ask the client if the attorney knows about the advance. If not, I have them contact the law firm. They get the name and email of the person at the firm who handles funding requests. I will email that person directly.”
— Daniel Costanzo, Founder, Direct Legal Funding
Frequently Asked Questions
How much funding can I get?
Direct Legal Funding advances $1,000 to $2 million per case, depending on the case value. Ask us about your case.
If I get a loan, can Direct Legal Funding tell me when to settle my case?
No. You and your lawyer stay in full control of your case. You decide when and how to resolve your case.
“That’s something we’d never even consider doing, even if it weren’t a law.”
— Daniel Costanzo, Founder, Direct Legal Funding
How fast can I get funded?
If the application is complete, the case qualifies, and the attorney’s office verifies the case details, an advance can happen same-day.
“If the attorney’s office responds by two o’clock in the afternoon, and everything’s dotted and crossed, I can get the person funded the same day.”
— Daniel Costanzo, Founder, Direct Legal Funding
Will a loan affect my credit score?
No. Even if you lose your case and don’t repay the funds, there is no effect on your credit score.
What happens if you lose your case?
You keep the funds originally advanced to you. There’s nothing to pay back. That’s the guarantee when you choose a lawsuit advance from Direct Legal Funding.
Is there debt collection?
No. Never. When you choose advanced lawsuit funding, you’re protected from debt collection and credit reporting. You can’t end up "underwater" like you can on a personal loan.
I have a trial verdict – is my case over?
Not necessarily. A verdict from a judge or jury can be appealed. A settlement is a final agreement that resolves the case. Lawsuit funding advances are paid back when there is a final settlement or final verdict.
Where do you offer loans?
We offer loans throughout New York, including:
How to Apply for a New York Lawsuit Loan
Since 2009, Direct Legal Funding has been a trusted leader in lawsuit funding.
If you need a New York lawsuit loan, the next step is simple: Contact Direct Legal Funding. We’ll process your application. If approved, we advance your funds as quickly as the same day.