Divorce Financing Firms As Last Resort
It’s no secret that litigating a divorce can be incredibly expensive. This fact can often seem daunting for the party who has been the stay-at-home caretaker of the family, or otherwise earns a small fraction of that of his/her spouse. Divorce financing firms might appear to be an attractive option for such a spouse. However, as noted in a recent New York Times article, the cases where this option might be appropriate are those where a divorce settlement could be around $1 million or more.
Our office frequently consults with potential clients who are apprehensive about their ability to finance a divorce action. For the vast majority of those consultations we suggest more suitable alternatives to the divorce financing firms. Under the right circumstances, asking friends or family for a loan (formalized with an official promissory note) is a preferable option. Another common alternative we suggest is requesting an advance against inheritance from parents. We generally advise against funding a divorce with retirement assets because of the extreme taxes and penalties. Seeking an advance from a divorce financing firm should be considered a last resort.