Maintenance Funding Provider
Frequently Asked Questions
The information contained in this FAQ section is provided for informational purposes and is not intended to be all-inclusive. Applicants are responsible for reviewing the statutes and administrative rules relevant to their specific application to ensure compliance with all requirements.
In the event of a conflict or discrepancy between the contents of the FAQ and the statute and rules, the statute and rules shall govern.
A person that enters into a consumer maintenance funding agreement with a consumer.
A consumer maintenance funding provider does not include:
- an immediate family member of a consumer;
- an accountant providing accounting services to a consumer;
- an attorney providing legal services to a consumer; or
- a bank, lender, financing entity, or other special purpose entity:
- that provides financing to a consumer litigation funding company; or
to which a consumer litigation funding company grants a security interest or
transfers a right or interest in a consumer litigation funding agreement.
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 obtained in the consumer's legal claim, with funds paid directly to the consumer.
A consumer maintenance funding agreement does not include:
- an agreement between a health care provider and a patient for providing medical treatment on a lien basis if repayment is not contingent on the outcome of the legal claim; or
- an agreement between a third party and a party to a legal claim for providing funds for medical treatment related to the legal claim on a lien basis if repayment is not contingent on the outcome of the legal claim.
- An individual who resides or is domiciled in the state;
- an individual who is a plaintiff with a legal claim in the state; or
- an estate for a decedent in a wrongful death claim in the state.
A person that enters into a commercial maintenance funding agreement with a party to a legal claim.
A commercial maintenance funding provider does not include a nonprofit
organization exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code.
A written agreement: whereby a third party agrees to provide funds to a named party affiliated with a legal claim; and that creates a direct or collateralized interest in the proceeds of a legal claim by settlement, verdict, judgment, or otherwise, which interest is based in whole or in part on a funding-based obligation to a legal claim.
A commercial maintenance funding agreement does not include?
- a consumer maintenance funding agreement;
- an agreement between an attorney and a client for the attorney to provide legal services on a contingency-fee basis or to advance the clients legal costs;
- a health insurance plan or agreement;
- a repayment agreement with a financial institution if the repayment is not contingent upon the outcome of the legal claim;
- a funding agreement to a nonprofit organization that represents a client on a pro bono basis;
- an agreement of an assigned claim to prosecute an environmental contamination matter seeking remediation of, or to recover the cost of remediating, a site that has been on the U.S. Environmental Protection Agency's Superfund National Priorities List;
- an agreement between a health care provider and a patient to provide medical treatment on a lien if the repayment is not contingent on the outcome of the legal claim; or
- an agreement between a third party and a party to a legal claim to provide funding for medical treatment related to a legal claim on a lien if the repayment is not contingent upon the outcome of the legal claim.
