Can a lawyer guarantee a loan to a client to help them avoid foreclosure and keep up their litigation?

Plain-English summary

The inquiry asked whether a lawyer or law firm could guarantee a loan to a client. The purpose of the loan was to let the client forestall a deed-of-trust foreclosure and thereby keep up the litigation, avoiding the uncertainty of living arrangements that would come with losing the home.

The committee was of the opinion that Rule 1.8 prohibits the arrangement. It treated the loan guarantee as financial assistance connected to maintaining the client's litigation, which the rule does not allow.

Currency note

This opinion was issued in 1987, before the Washington State Bar Association's adoption of the 2006 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer guarantee a client's loan to stop a foreclosure during the case?

A: Per the committee, no. It concluded RPC 1.8 prohibits guaranteeing a loan to a client to forestall a deed-of-trust foreclosure tied to keeping up the litigation.

Q: Why did the committee treat this as prohibited assistance?

A: The committee tied the prohibition to the loan's purpose, helping the client maintain the litigation by avoiding the disruption of losing the home, which it read as financial assistance the rule bars.

Background and rules framework

The opinion applied RPC 1.8 (the conflict-of-interest rule on transactions with and financial assistance to clients, corresponding to ABA Model Rule 1.8), specifically the bar on a lawyer providing financial assistance to a client in connection with litigation. The committee read a loan guarantee aimed at keeping the client in the home and able to maintain the litigation as falling within that prohibition.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.8 (conflict of interest: current clients; specific rules); Washington RPC 1.8(e)

See also

• WSBA Ethics Op. 1145: Guaranteeing a Settlement
• WSBA Ethics Op. 1162: Advancing Funds After Settlement
• WSBA Ethics Op. 1087: Guaranteeing a Client's Medical Bills

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1142

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Opinion: 1105
Year Issued: 1987
RPC(s): RPC 1.8(e)
Subject: Lawyer guaranteeing loan to client

The Committee was of the opinion that Rule 1.8 of the Rules of Professional Conduct would prohibit a lawyer or a law firm from guaranteeing a loan to a client in order to enable the client to forestall a deed of trust foreclosure and thereby better enabling the client to maintain litigation by avoiding the uncertainty of living arrangements engendered by the loss of the home.