You Decided You Want To File…Now, What? How to afford to divorce your spouse
March 25, 2020
BY: Lesnevich, Marzano-Lesnevich, O'Cathain & O'Cathain
Divorce is expensive. While there is, of course, an emotional toll, there is also a heavy financial toll for which many clients are not prepared. This is a problem not only for clients but also for the divorce lawyers and experts representing them. Even under the best circumstance, divorce is difficult and costly.
Options when you can’t afford a divorce:
In a perfect world, both spouses have money set aside, though, in reality, people save for weddings, not divorces. While it would be wonderful if both spouses got along and could agree on how assets should be divided, unfortunately, this is not always the case. It is important for clients to know about options they have to fund their divorce.
Application To The Court
As an alternative to saving, the moneyed spouse could be ordered by the court to pay both sides’ legal fees and expert costs, but even getting to motion practice can be expensive and time-consuming. Not to mention, there are no guarantees the client will be awarded fees. Further, many judges defer a decision on fees to the end of the case.
Putting the cost of a divorce on a credit card is another option, but for many, the credit card limit would not meet the cost of the legal fees. Additionally, interim payments have to be made which may not be possible for some clients (and please know that low credit scores may prevent a spouse from being eligible for a credit card after the divorce).
Clients sometimes look to a bank to refinance the marital home to help pay for their divorce. Litigants may pull equity from a house in order to pay for interim support and legal fees until a divorce is final. Home equity loans can take many months to be approved, and the loss of a home can threaten custody battles. On the other hand, lenders may not approve clients during a divorce, causing a variety of roadblocks to a divorce. Sometimes couples going through a divorce don’t know where to turn.
For many couples, one spouse has easier access to their combined wealth. Oftentimes the monied spouse will cut off access to funds by the non-moneyed spouse entirely, a court will freeze assets, or assets are not liquid. Divorce funding provides a cash advance of the client’s potential settlement for legal fees, expert costs, and living expenses. It “levels the playing field,” enabling litigants to afford their attorney and expert fees, while maintaining their standard of living. Repayments are not made until a settlement is reached and cases can be funded in as little as two weeks. Divorce funding provides access to this essential capital.
Clients may not have the liquidity to engage in divorce proceedings and simultaneously afford living expenses, such as mortgage payments, school tuition and other personal costs during the proceedings. These expenses are sometimes used as leverage by the moneyed spouse, forcing clients to agree to an inequitable settlement. With the liquidity of divorce funding, no one is forced into a settlement less than they deserve.
Nicole Noonan, Esq., CEO of New Chapter Capital Inc., specializes in divorce funding. She formerly served as President of Novitas US. She is a nationally recognized divorce expert and pioneer of divorce funding. Crowned the “Fairy Godmother of Divorce” by the New York Post. Formerly President of National Divorce Capital, prior to which she was Director at BBL Churchill.