When a parent is injured and cannot work, rent and grocery bills do not wait for a claim to settle. Some families look at a consumer legal funding agreement, sometimes called pre-settlement funding, to bridge that gap. The money is not a conventional loan. It is typically repaid only if the claim produces proceeds.

There is no single federal statute that sets the contract terms for these agreements. States differ on disclosures, cancellation windows, and what a company is permitted to collect from a recovery. A contract that is lawful in one state is not automatically lawful in the next.

Ohio’s October 2026 checklist

Ohio put a detailed statute on the books. Revised Code section 1357.03, titled “Consumer legal funding agreement requirements,” took effect on October 6, 2026, under House Bill 105 of the 136th General Assembly. A company must not enter into, or seek to enter into, an agreement unless every condition in 1357.03(A) is met. Those conditions cover the face of the form, the cancellation window, and a written attorney acknowledgment.

The front page of the agreement must, under 1357.03(A)(3), disclose the funded amount, an itemized list of all one-time and recurring charges and how those charges accrue, and the maximum amount the consumer assigns under the agreement, including the funded amount and charges but excluding certain breach or fraud penalties. If the consumer already has more than one agreement with the same company, 1357.03(A)(3)(d) also requires the cumulative amount assigned under all of those agreements. Families comparing settlement loan options by state are therefore looking at different legal regimes, including this Ohio front-page checklist, not just different price labels. The form must be completely filled in when it is presented for signature, and 1357.03(A)(2) requires space on each page for the consumer’s initials.

How long does the consumer have to cancel?

Section 1357.03(A)(4) gives the consumer a fixed cancellation right. The agreement must allow the consumer to cancel, without penalty or further obligation, by returning the full amount of disbursed funds within ten business days after the funding date. The consumer is permitted to deliver the company’s uncashed check to the company’s offices in person within those ten business days, or to mail a notice of cancellation with the returned funds, postmarked within ten business days after receiving the money, by insured, registered, or certified United States mail.

The body of the agreement must also include the statements required by 1357.03(A)(5). Among them is a disclosure that the funded amount and agreed charges are payable only from proceeds of the legal claim, and that the consumer will not owe the company anything if there are no proceeds, unless the consumer has violated a material term or committed fraud. Another required statement tells the consumer that the company has no role in deciding whether, when, and how much the claim is settled for.

The attorney acknowledgment, and what happens if it is missing

Section 1357.03(A)(6) requires a written acknowledgment from the attorney already retained on the claim. The attorney must attest to having reviewed the agreement and the required disclosures with the consumer, to being paid on a contingency under a written fee agreement, to disbursement of proceeds through the attorney’s trust account or a settlement fund, and to not having received a referral fee or other consideration from the funding company. The attorney must also agree to follow the professional-conduct rules adopted by the Ohio Supreme Court.

The consequences are not cosmetic. Under 1357.03(B)(1), a violation of section 1357.03 or 1357.04 is an unfair or deceptive act or practice in violation of section 1345.02, and 1357.03(B)(2) gives an injured consumer the same relief available under section 1345.09. Section 1357.03(C) goes further: any willful violation, including omission of the attorney acknowledgment required by 1357.03(A)(6), renders the agreement unenforceable by the company, the consumer, or any successor in interest. Terminating that attorney or hiring a new one does not, by itself, make the agreement unenforceable.

A family that signs in a hurry and later finds a blank line, a missing acknowledgment, or no ten-day cancellation clause is looking at a contract the Ohio statute either forbids or, in a willful case, refuses to enforce. That review has to happen before the ten business days run out. After that window closes, the statutory cancellation right in 1357.03(A)(4) is no longer available. A consumer legal funding agreement is a short-term cash advance against a claim, which is a different money decision from the long-term financial planning for kids the host has already covered.