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LEGAL NEWSLINE

Thursday, March 28, 2024

Lawsuit lending bill introduced in Indiana

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INDIANAPOLIS (Legal Newsline) -- An Indiana state senator has introduced a bill that would make lawsuit lending loans subject to the same regulations as traditional loans.

Sen. Doug Eckerty (R-Yorktown) introduced Senate Bill 378 on Tuesday.

The bill would have a consumer lawsuit loan fall under the definition of a loan in the state code, and it would require a plaintiff who has received a non-recourse loan "secured by the proceeds of a lawsuit to file a copy of the lending agreement with the court and provide a copy to the opposing party."

It also defines "consumer lawsuit lending" or "consumer lawsuit loan" as providing money to a consumer for any purpose other than prosecuting the consumer's proceeding, where the repayment of the money is required only if the consumer prevails in the proceeding; and sourced from the proceeds of the proceeding, by judgment, settlement, or otherwise; or purchasing from a consumer a contingent right to receive a share of the potential proceeds of the consumer's proceeding, by judgment, settlement, or otherwise.

It says that if a consumer lawsuit lending agreement is executed before the consumer files a complaint or similar pleading, the consumer must file a copy of the agreement with the court when the complaint or similar pleading is filed and serve a copy of the agreement on the opposing party. If it is filed after the complaint is filed, the consumer must file a copy of the agreement with the court and serve it to the opposing party within 10 days of its execution.

If passed, the law would become effective July 1.

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