Can I Use Litigation Funding to Cover Living Expenses?

Yes — covering living expenses is one of the most common uses of pre-settlement funding. There are no restrictions on how you spend your advance. Rent, food, utilities, and other daily costs are all appropriate uses.

Pre-settlement funding can be used for any purpose, with no restrictions whatsoever. Living expenses — rent, mortgage, groceries, utilities, childcare, transportation, and other daily costs — are among the most common uses, particularly for plaintiffs whose injury has reduced their ability to work.

The financial reality for many injury plaintiffs is that litigation takes far longer than anyone anticipates. Cases that initially seem likely to resolve in months can extend for years. Pre-settlement funding provides a bridge: the ability to cover essential living costs during that period without depleting savings, taking on traditional debt, or accepting a low settlement offer simply because you cannot afford to wait.

There is no reporting requirement on how you use your advance. The funder does not monitor your spending and will not require receipts or documentation of use. The advance is deposited to your bank account (or by check, depending on your preference), and from that point it is available for whatever you need.

One practical point: take only what you need. Because interest accrues on the full advance amount from the date of disbursement, a larger advance costs more over time. If your immediate need is $3,000 for next month's rent, there is no benefit to taking a $10,000 advance and letting $7,000 sit in your account. Apply for additional funding if your needs increase.

Source: ALFA Consumer Litigation Funding Code of Conduct — No restrictions on plaintiff use of funded amounts.

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