SecProbe.io

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Mail Stop 6010

Via Facsimile and U.S. Mail

July 5, 2005

Morton Reed, Ph.D.
President and Chairman of the Board
Litfunding Corp.
3700 Pecos McLeod Drive, Suite 100
Las Vegas, Nevada  89121

      Re:	Litfunding Corp.
Form 10-KSB for the fiscal year ended December 31, 2004
		Filed March 21, 2005
		File No. 000-49679

Dear Dr. Reed:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures.  In our comments, we ask you to provide us
with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Consolidated Financial Statements, page 16

Notes to Consolidated Financial Statements for the years ended
December 31, 2004 and 2003, page 22

3.  Bankruptcy Petition and Reorganization, page 27

1. Please refer to your disclosure regarding your voluntary
transfer
of the control and the collection of settlement agreements to an
IEP
distribution agent for the benefit of IEP claimants who comprise
class 6 under the terms of the reorganization plan.  Please tell
us
why you believe the Company was effectively relieved of the
obligation due to the IEP claimants for the IEP note of
approximately
$26.7 million and no longer responsible for this obligation under
the
terms of the reorganization plan.  Please explain to us how this
voluntary transfer of the responsibility to monitor and collect
the
settlement amounts to an IEP distribution agent qualifies as an
extinguishment of liabilities under paragraph 16 of SFAS 140.

2. Further, please tell your basis to derecognize the carrying
value
of the settlement receivables and advances totaling approximately
$12.3 million that resulted in a gain on the transfer of
approximately $14.1 million.  Explain to us how the transfer meets
the conditions to be accounted for as a sale under paragraph 9 of
SFAS 140.

*    *    *    *

      	Please respond to these comments within 10 business days
or
tell us when you will provide us with a response.  Your letter
should
key your responses to our comments.  Detailed letters greatly
facilitate our review.  Please file your letter on EDGAR under the
form type label CORRESP.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in your letter, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Donald Abbott, Senior Staff Accountant, at
(202) 551-3608 if you have questions regarding the comments.
Please
contact me at (202) 551-3679 with any other questions.

								Sincerely,

								Jim B. Rosenberg
						Senior Assistant Chief
						Accountant

Morton Reed Ph.D.
Litfunding Corp
July 1, 2005
Page 3

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