What Is Divorce Funding?
Divorce can not only be painful, but it can also, in some instances, be expensive, depending upon the specific circumstances of the parties involved. According to a survey conducted by Avvo, 58 percent of people with children cite cost as their top concern when it comes to divorce. And while many might assume that the top 1 percent is excluded from these cost concerns, in fact, it can also be an issue for those going through a divorce from someone who is well financed, especially if they have been a homemaker and/or do not have access to the couple’s finances. As a result, some people actually seek out something called divorce funding.
Even a person who has a good salary can sometimes find themselves shut out of the legal system, and some have found that divorce funding can give them more of a “fair shot” in challenging their ex in court. Otherwise, some ex-spouses may not find the motivation to settle with their ex, knowing that they do not have the financial ability to continue litigation with them.
How Does It Work?
So how do these divorce funding companies work? Some take a percentage of the final proceeds, some charge interest on the money spent (like a regular lender), and some simply charge a flat fee. Companies’ average clients have been married for around 12 years or so and involved in the litigation process for years and years with no resolution.
Some of those who started these companies did so because they were the “out-spouse” in their own divorce–the one who had fewer funds for the divorce because they didn’t control the couple’s money and thus had far less negotiating power. Some of the companies have even been founded by previous family law attorneys; individuals who had clients who could not afford to see their divorce followed through to a favorable settlement. Seeing an equity problem—particularly when it came to representation for the spouse who had been the homemaker in the household—helped to level the playing field, so to speak.
For some, the service fills a real need—helping to address a tight spot that some are in when they cannot get a loan against their house. Many of these companies only collect once a settlement is reached, benefitting both the client and the company that finances their divorce. The company essentially stakes the spouse without access to marital funds; for those that are paid via a nonrecourse advance instead of a fee—it’s the only option for taking care of themselves after divorce.
Contact Us for Assistance during Divorce
If you are contemplating or going through divorce and you live in Fort Lauderdale, Boca Raton, Broward County, or surrounding areas, contact us at the office of Sandra Bonfiglio to learn more about how we can help. We provide compassionate representation and discuss all of your options, ensuring that the process is as smooth and painless as possible.