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Divorce financing is a growing industry

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Arizona residents may be interested to learn of a growing industry that has recently developed across the country. Those individuals, who are involved in contentious divorce proceedings, may now be able to obtaining financing to defray the legal costs associated with a high asset divorce.

Reaching a mutual agreement on such issues as property division, spousal support, child custody, child support and visitation can be very difficult for some couples. Sometimes, one spouse has a much greater income than the other, and is able to use that to their advantage by engaging in protracted legal battles over certain issues. This is where a financing option, such as this one, can level the playing field.

Not all financial experts agree that this is the best option to pursue. Many believe that it is more prudent to borrow from an already open home equity line or credit, funds from the sale of a marital property or a non-retirement portfolio.

A typical loan of this kind is for approximately $250,000, according to BBL Churchill, a firm based in New York that finances these types of loans. Their typical clients are individuals engaged in high asset divorces, such as the spouses of doctors, hedge fund managers, finance company managers, accountants and accounting partners.

Divorce can be a very difficult, emotional ordeal. It is even more difficult when financial issues create inequalities between spouses that can affect the outcome of a particular case or issue that is being litigated. Reaching an amicable settlement is sometimes very difficult under these circumstances. Although taking out any loan must be weighed heavily, it may be an option for some to consider under limited circumstances.

Source: Reuters, "Financing options open up for costly divorces, "Geoff Williams & Beth Pinsker, April 16, 2013.

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