State rules
Funders activeCase Equity in North Carolina.
ClaimAngel funders are active in North Carolina. One set rate: 27.8% simple, 2x cap at 46 months. If you don't win, you owe nothing back.
The industry calls this pre-settlement funding, legal funding, or a lawsuit loan. We call it Case Equity.
The short version
You can get funding in North Carolina for draws of $25,000 and over. The new law bans funding the costs of running a case; money for living is a different lane. Draws start at $25,000 because the state caps rates on smaller loans.
The facts
What North Carolina law says.
As of July 23, 2026
North Carolina is the first state to ban litigation investment outright. House Bill 315 became Session Law 2026-14 on June 22, 2026 and took effect the same day. It creates a new Article 52 of Chapter 66, the Prohibit Litigation Investments Act. The Act makes it unlawful to provide money for the costs of a civil case in exchange for repayment that is contingent on the outcome. It is a prohibition, not a rate cap. Two older layers sit underneath it and still control consumer funding: the state's usury statute, which caps rates on loans of $25,000 or less, and its champerty case law.
- June 22, 2026
- Became law and took effect
- $50,000
- Civil penalty, per violation
- 157 to 1
- The combined House and Senate vote
- 9
- Exclusions written into the ban
Money for the case
- Court fees and filings
- Expert witnesses
- Litigation costs and expenses
§§ 66-512(3), 66-513
Money for living
- Rent
- Groceries
- Medical bills
§ 66-512(3)(g)
N.C. Gen. Stat. §§ 66-511 to 66-515
Prohibit Litigation Investments Act (Session Law 2026-14 / House Bill 315)
Read the statute →N.C. Gen. Stat. § 24-1.1
Contract rates and fees (the usury cap on loans of $25,000 or less)
Read the statute →What the Act prohibits
It is unlawful to engage in or furnish "litigation investment" in North Carolina. The Act defines that as providing money, "whether as a direct payment, advancement, loan, investment, or otherwise," for the fees, costs, and expenses of or related to a pending or potential civil proceeding, in exchange for a right to repayment or other consideration that is contingent in any respect on the outcome. (§§ 66-512(3), 66-513)
Effective date and reach
Signed June 22, 2026, effective immediately. It applies to civil proceedings commenced on or after that date, and to funding contracts entered into, renewed, or amended on or after that date. Contracts and cases that predate June 22, 2026 are not covered. (SL 2026-14, § 3)
What the Act does not touch
Nine exclusions: contingency-fee legal services; attorney and law firm advancement of costs under the Rules of Professional Conduct; insurers' duties to defend or indemnify; nonprofits funding their own or their members' cases at capped repayment; nonprofit pro bono legal services; direct lending with repayment not contingent on the case; money for a party's personal and household expenses during the case; litigation-cost support where the provider takes no contingent right; and help from immediate family. (§ 66-512(3)(a)-(i)) The one that matters for living-expense funding is exclusion (g), verbatim:
“The provision of money or other financial support to a party for personal and household expenses during the pendency of a civil proceeding so long as the money or financial support is not used for the fees, costs, and expenses of the civil proceeding.”
N.C. Gen. Stat. § 66-512(3)(g)
The household-expenses question
Exclusion (g) turns on how the money is used, not on how repayment is structured. Money provided to a party for personal and household expenses during the case falls outside the ban so long as it is not used for the fees, costs, and expenses of the proceeding. How regulators and courts read that line for outcome-contingent consumer funding is the open question. No North Carolina court has construed the Act yet. (§ 66-512(3)(g))
Penalties
A contract that violates the Act is void. The Attorney General may seek an injunction and a civil penalty of up to $50,000 per violation. A person injured by a violation may sue and elect between common-law damages and treble the full potential litigation investment, plus court costs and attorneys' fees. The Act instructs courts to construe it liberally. (§§ 66-514, 66-515)
Rate cap
None in the Act itself. The Act prohibits covered funding rather than capping its price. The binding price rule comes from the usury layer below.
Why funding starts at $25,000
North Carolina case law treats outcome-contingent consumer advances as loans subject to Chapter 24 (Odell v. Legal Bucks, LLC, N.C. Ct. App. 2008). Under § 24-1.1, interest on a loan of $25,000 or less is capped at the greater of 16% or the six-month Treasury rate plus 6%, while parties may agree to any rate where the principal exceeds $25,000. Funding priced above that cap can therefore only be written at $25,000 and over. That is the line ClaimAngel funders draw at in North Carolina.
Champerty
North Carolina still recognizes champerty and maintenance. In Oliver v. Bynum (163 N.C. App. 166, 2004), the Court of Appeals held an agreement to finance a suit champertous where it served to stir up litigation. Funding that does not stir up litigation or intermeddle in the case stands on ordinary contract principles. In Odell, the court found the funding agreement before it was not champertous for exactly that reason: the funder had no right to direct the case.
Also in the bill
Part II raises several workers' compensation schedule benefits, including the minimum weekly total-incapacity compensation from $30 to $50 and the caps for serious disfigurement and organ loss. Those changes take effect July 1, 2027. (SL 2026-14, § 2)
For plaintiffs
- If your case began before June 22, 2026 and your funding contract predates that day, the Act does not apply to it. Renewing or amending that contract on or after June 22, 2026 brings it under the Act.
- The Act draws a line by use of funds. Money for rent, groceries, and medical bills during your case sits in exclusion (g). Money for the costs of running the case does not.
- ClaimAngel funders remain active in North Carolina for draws of $25,000 and over. The floor comes from the usury statute: the state caps rates on loans of $25,000 or less, and case law treats consumer funding as a loan under Chapter 24.
For law firms
- Contingency fees and firm advancement of costs are expressly excluded. Your fee agreements are untouched. (§ 66-512(3)(a)-(b))
- Outcome-contingent outside funding of litigation costs is now unlawful in North Carolina. Contracts in violation are void, and exposure runs to $50,000 per violation plus treble-damage suits.
- The Act is a special jurisdiction statute. Furnishing litigation investment to a party or counsel of record in a North Carolina proceeding subjects the funder to suit in North Carolina regardless of where it does business. (§ 66-514(d))
Sources
- Session Law 2026-14 (House Bill 315), ratified text, North Carolina General Assembly (accessed July 23, 2026)
- House Bill 315 bill history, North Carolina General Assembly (accessed July 23, 2026)
- North Carolina Enacts First-in-the-Nation Ban on Third-Party Litigation Financing, Consumer Finance Monitor (Ballard Spahr) (accessed July 23, 2026)
- North Carolina Becomes First State to Pass Outright Ban on Litigation Financing, Insurance Journal (accessed July 23, 2026)
- N.C. Gen. Stat. § 24-1.1, Contract rates and fees, North Carolina General Assembly (accessed July 23, 2026)
- Odell v. Legal Bucks, LLC, N.C. Court of Appeals (2008), FindLaw (accessed July 23, 2026)
- Oliver v. Bynum, 163 N.C. App. 166, 592 S.E.2d 707 (2004), North Carolina Judicial Branch (accessed July 23, 2026)
For educational purposes only, not legal advice. Laws change and courts reinterpret them. Check the dated sources on this page, and talk to a lawyer licensed in your state about your own case.
Coverage
Our reporting on North Carolina.
Our opinion
OpinionOur position on House Bill 315
North Carolina saw a real problem. Opaque outside money was buying stakes in lawsuits. Nobody knew the terms. Nobody knew who was steering. The General Assembly voted 157 to 1 to end it. We understand that vote.
The most important part of the bill is not the ban. It is exclusion (g). The Act preserves money for personal and household expenses during a case, so long as it never touches the fees, costs, and expenses of the proceeding. The legislature banned outside money that buys into the lawsuit, and in the same breath it kept the money that keeps a family alive while the lawsuit runs.
This is exactly why Case Equity is not litigation funding. We do not pay for filings, experts, or fees. We never touch the costs of running the case. Case Equity is money for living while the case runs. Rent. Groceries. Medical bills. The General Assembly drew that line itself in exclusion (g). We built the product on the right side of it.
Read exclusion (g) again, because it speaks volumes. Out of everything the General Assembly banned, it went out of its way to preserve one thing: money for a family to live on while their case runs. That carve-out is the most important sentence in the bill, and it keeps the door open for Case Equity in North Carolina.
There is a deeper reason that line had to survive. Your case is your asset, and you have the right to sell what you own. North Carolina stood on the right side of the Constitution by not banning that.
The better law finishes the job by putting standards on the lane the statute keeps open. Full disclosure before signing. No stake in the outcome and no influence on the case. That is the standard we already run on every case: one set public rate, 27.8% simple, capped at 2x, and if you lose, you owe nothing back.
Mandate the disclosure. Ban the interference. Keep the lifeline the statute already keeps.
The ClaimAngel team
July 23, 2026
The questions
North Carolina funding, asked plainly.
Is pre-settlement funding legal in North Carolina?
Yes. You can get funding in North Carolina for draws of $25,000 and over. The new law bans funding the costs of running a case; money for living is a different lane. Draws start at $25,000 because the state caps rates on smaller loans. On ClaimAngel it is offered as Case Equity: one set rate, a hard cap, and nothing owed if you lose.
Can I get a lawsuit loan in North Carolina?
What the industry calls a lawsuit loan is not a loan: a loan bills you monthly and follows you if you lose, and this does neither. The accurate name for the modern product is Case Equity, money drawn from the value your case already holds. You can draw on your North Carolina case through ClaimAngel today, with no credit check and nothing owed if you lose. In North Carolina, draws start at $25,000: the state caps rates on smaller loans, so funding is only written at $25,000 and over.
How much does legal funding cost in North Carolina?
North Carolina does not set a state-specific price cap. On ClaimAngel the rate is public and the same everywhere we serve: 27.8% simple annual interest, never compounding, with a hard cap at 2x the draw plus financed fees. The calculator shows the exact payoff for your numbers, to the penny.
Is pre-settlement funding a loan?
No. A loan follows you if you lose and bills you along the way. Case Equity is non-recourse: money from the value of your case, repaid only out of a winning settlement. Lose the case, keep the money, owe nothing back.
What happens if I lose my case?
You owe nothing back. Non-recourse is the product, not fine print: the draw is repaid only from a settlement or judgment in your favor.
Ready when you are. Same set rate for every North Carolina case, and nothing owed if you don't win.