Divorce is expensive. While there is, of course, an emotional toll, there is also a heavy financial toll for which many people are not prepared. Even under the best circumstance, divorce is difficult and costly. And while help is out there, when you’re looking for it, you want advice for women wearing your particular set of shoes.
As coronavirus (COVID-19) rages throughout the world, many women are quarantined with their spouses. Some of those women are starting to think about divorce. Although it’s too early to tell, divorce attorneys world-wide are reporting an increase in requests for consultations. If you are thinking about divorce during this uncertain time of health and economic crisis, you might be met with new challenges, such as pay cuts or even job loss. Courts in most jurisdictions are also closed for non-emergency matters.
During this time, how will you afford to pay for legal fees and interim expenses if your spouse cuts you off and you cannot submit an application to the court or even meet with your attorney?
What are your options for funding 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, this is, unfortunately, not always the case. It’s important for clients to know about options they have to fund their divorce. Here is some advice for women thinking about how they can afford to divorce.
Divorce funding is one such option. For many couples, one spouse has easier access to their combined wealth. The moneyed spouse will often 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 divorce expenses, 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 start divorce proceedings and simultaneously afford living expenses, such as mortgage payments, school tuition, and other personal costs during the proceedings. Sometimes the moneyed spouse will use these expenses as leverage, forcing clients to agree to an inequitable settlement.
Should you lack the funds to hire proper divorce assistance, divorce funding could be an option. Divorce funding gives qualified spouses’ lines of credit while they work toward a fair divorce settlement. It’s an increasingly popular product that can help divorcing spouses find hidden assets and ensure a more secure financial future for themselves and their children.
With the liquidity of divorce funding, no one is forced into a settlement less than they deserve. Divorce funding is a valuable tool not just for clients but also for experts. It has become an integral practice management tool for an increasingly large number of divorce lawyers in the United States.
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. Many judges also defer a decision on fees to the end of the case. As of now, the courts are closed, and when they are reopened, the backlog of cases will be significant and your application may not be heard for an extensive period of time.
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. You’d have to make payments during the divorce proceedings, too, 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 turn to a bank to refinance the marital home and help pay for their divorce. Litigants may pull equity from a house 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. Sometimes couples going through a divorce don’t know where to turn.
Speak with a divorce professional to weigh out which option is best suited for your case. What worked for your friend may not be the choice for you. The financial aspect of divorce likely seems overwhelming. Whatever you choose, remember—do not throw good money after bad. Decide your nonnegotiables as well as those items you are willing to give up. Some of the best advice for women going through this journey is to allow yourself to look at this part of your divorce as a business transaction, so you can commit to your divorce recovery and move on to your next chapter in life.
To learn more about divorce funding and how it can help you, please visit newchaptercapital.com, call (212) 404-7807, or email Nicole at [email protected]
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 and formerly President of National Divorce Capital, Nicole was also Director at BBL Churchill.
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