Tuesday, July 30, 2013

Cash is King in a Divorce- So Find A Way To Level The Playing Field

I really hate to say this, but just the other day a judge told me "he who holds the gold has control."  It is sad but true, you may want your day in court, but can you afford it?  Not many can-- at least not without some help.  If significant sums of cash are not readily available to you, and you don't have a Line of Credit and can't borrow from family or friends, where are you going to come up with the $10,000 or more required as a typical litigation retainer?  I've seen many cash out their 401(k)s or IRAs in order to finance their divorce or custody disputes, and every day I see people settle in order to avoid digging a deeper financial hole for themselves.  These are not very appealing options to say the least.

There is a reason married men like to jokingly say, "it is cheaper to keep her."  A litigated divorce that is hotly contested is simply not cheap-- you are paying for legal services by the hour, and the average rates for a good attorney in DC will range from $300-600 per hour.  Custody evaluations start at $15,000 if you are using a private expert vs. the court services.  Vocational experts and business valuation experts also work by the hour and with retainers starting at least with $5,000.  If your child needs to have his/her own attorney, that is yet another expense that is usually pro-rated among the parties.  I will skip the full range of experts available, but hopefully you can start to see how easily the bills rack up.

Earlier this month, Good Morning America presented a story about a financial firm in NY that lends money to women going through a divorce.  Based on the assets involved, the bank can loan an individual up to $250,000 to cover not just attorney's fees, but also living expenses while the litigation is pending.  These are like short-term bridge loans, with interest rates ranging from about 8-20%  Obviously clients need to really do their homework to make sure this is the best option for them, but I definitely see this as a growing trend.

It was an honor to be able to contribute to this piece, and for those who missed the GMA segment, here is the link:


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