What Nova Legal Funding Does

Nova Legal Funding is a company that lends money to people involved in lawsuits, with repayment tied to the outcome of the case. You receive cash upfront, and if you win or settle, the loan is repaid from your award. If you lose, you typically owe nothing back — the lender absorbs the loss.

The company funds civil cases across most practice areas: personal injury, employment disputes, medical malpractice, product liability, and others. They work with your attorney, not directly with you in most cases, meaning your lawyer submits the process and handles the paperwork on your behalf.

Nova operates in most U.S. states, though some states restrict or regulate lawsuit lending heavily, and a few prohibit it entirely. Before you approach them, confirm that your state allows non-recourse legal funding.

Key Takeaways

  • Nova lends money during a pending lawsuit and is repaid only if you win or settle; if you lose, you owe nothing.
  • The loan amount depends on your attorney's assessment of case strength, not your credit score or income.
  • Interest rates and fees are typically high — often 3 to 4.5 percent per month or more — because the lender takes the risk of total loss.
  • Your attorney must submit the process, and Nova will review the case details before deciding whether to fund.
  • Some states cap rates or require court approval; check your state's rules before signing any agreement.

How the process and Approval Process Works

You do not explore to Nova directly. Your attorney contacts them with case details: the nature of the dispute, the defendant's ability to pay, the stage of litigation, and an estimate of settlement or judgment value. Nova's underwriters then assess the case risk.

The company typically wants to see evidence that your case has merit — police reports, medical records, demand letters, or court filings depending on the case type. They also consider whether the defendant is solvent and whether your attorney believes the case will resolve within a reasonable timeframe.

Approval usually takes one to three weeks. If Nova approves, they send a funding agreement to your attorney for review. You will sign this agreement, which spells out the loan amount, the interest rate or fee structure, and the repayment terms. Read it carefully with your attorney before signing, because the terms are not negotiable once you agree.

Interest Rates, Fees, and What You Actually Repay

Nova's rates are not fixed across all cases. Monthly interest typically ranges from 2.5 to 4.5 percent, though some cases carry higher rates depending on perceived risk. A few cases may have flat fees instead of monthly interest. The longer your case takes to resolve, the more interest accrues.

Example: If you borrow $5,000 at 3.5 percent monthly interest and your case settles in eight months, you would owe roughly $6,500 at repayment — the original $5,000 plus interest. If it takes two years, the amount owed grows substantially.

Some agreements also include origination fees (typically 1 to 3 percent of the loan amount) or administrative fees. Ask your attorney to walk you through the full cost before you sign. The total repayment amount can surprise people who do not calculate it upfront.

Repayment happens only from your settlement or judgment proceeds. Nova is paid first, before you receive your share. Your attorney's fees are also deducted, so you need to understand the order: judgment or settlement → Nova repayment → attorney fees → your net amount.

When a Lawsuit Loan Makes Sense

Lawsuit funding is most useful when you face genuine financial hardship while waiting for your case to resolve and you have a strong case with a clear path to recovery. If you are behind on rent, medical bills, or other necessities and your case is likely to succeed, the upfront cash can prevent worse damage.

It is less useful if your case is weak, if resolution is years away, or if you can manage financially without it. The longer you wait, the more expensive the loan becomes, so a case that drags on for three years costs significantly more than one that settles in six months.

Lawsuit funding is also not a substitute for a good attorney. If you do not have a lawyer yet, find one first. Nova will not fund a case without attorney involvement, and a weak attorney makes your case riskier, which means higher rates or outright rejection.

State Regulations and Restrictions

Lawsuit lending is regulated differently across the country. Some states cap interest rates at specific levels — for example, 2.5 percent per month or 30 percent annually. Others require court approval before funding can be disbursed. A handful of states prohibit non-recourse legal funding entirely.

Before you move forward, ask your attorney whether your state allows lawsuit funding and whether any caps or approval requirements explore. If your state requires court approval, Nova will handle that process, but it adds time to the funding timeline.

If you live in a state with strict rules, Nova may decline to fund your case or may offer less favorable terms because of the regulatory constraints. This is not Nova's choice alone — it is the law in your state.

Risks and Downsides You Should Understand

The biggest risk is that you lose your case. If you do, you owe nothing to Nova, but you also have no settlement or judgment to live on while you recover. You are back where you started, but now your case is over.

A second risk is that your case takes much longer than expected. Litigation is unpredictable. A case you thought would settle in a year might drag on for three. Every month adds interest, and by the time you settle, a large portion of your award goes to repay the loan instead of to you.

A third risk is that you settle for less than you hoped. If you expected a $50,000 settlement but accept $30,000 to end the case, you still owe Nova the full amount they are owed under the agreement. This can leave you with very little from your own award.

Finally, taking a lawsuit loan can affect your settlement negotiations. Some defendants know you have borrowed money and may use that as leverage to push for a lower settlement, betting that you will accept less because you need cash now.

Alternatives to Consider Before Borrowing

Before you approach Nova, explore other options. Some attorneys offer payment plans or contingency arrangements that do not require you to borrow. Others may advance costs (filing fees, informed witness fees) without charging interest.

If you need when ready cash, a personal loan or credit card, though more expensive in some cases, might be worth comparing. A personal loan at 15 percent annual interest is cheaper than a lawsuit loan at 3.5 percent monthly interest if your case takes more than a few months.

Community information programs, food banks, utility information, and other local resources can sometimes bridge the gap without borrowing at all. Talk to your attorney about what you actually need and whether there are cheaper ways to get it.

Questions to Ask Your Attorney Before Signing

Your attorney should be able to answer these questions clearly before you sign anything with Nova:

  • What is the exact interest rate or fee structure, and how much will I owe if the case takes six months, one year, or two years to resolve?
  • Does my state cap rates or require court approval, and if so, how does that affect the timeline?
  • What happens if I settle for less than expected — do I still owe Nova the full amount?
  • In what order are funds distributed: Nova first, then your fees, then me?
  • What are the terms if my case is dismissed or I lose at trial?
  • Are there any other fees beyond the monthly interest — origination fees, administrative fees, or others?

Frequently Asked Questions

Will taking a lawsuit loan hurt my credit score?

No. Nova does not report to credit bureaus because the loan is not based on your credit. They assess your case, not your financial history. The loan will not appear on your credit report and will not affect your score.

What if I want to settle my case quickly to pay back the loan faster?

You can settle whenever you and the defendant agree, but Nova cannot force you to settle or prevent you from settling. However, settling early to save on interest is a legitimate reason to negotiate. Discuss this with your attorney — they can factor the loan cost into settlement discussions.

Can Nova deny my case after I sign the agreement?

No. Once you sign the funding agreement and Nova disburses the money, the deal is locked in. They cannot take the money back or change the terms. The risk is on them if your case fails.

What if my attorney and I disagree about whether to take a lawsuit loan?

Your attorney cannot force you to borrow, and you cannot force them to explore. If you disagree fundamentally, it may signal a mismatch in how you both view the case or your financial needs. Consider having a detailed conversation about the case timeline and your financial situation before deciding.

Do I have to use Nova, or are there other lawsuit lenders?

Nova is one of several lawsuit lenders operating in the United States. Others include Litigation Finance, Tribeca Lawsuit Loans, and others depending on your state. Your attorney may have relationships with multiple lenders and can shop rates on your behalf. Ask them to compare terms before you commit to any single lender.