Balance Point Divorce Funding, a New Way to Finance Divorce

On behalf of The Marks Law Firm, L.L.C. posted in Divorce on Wednesday, December 22, 2010

We discussed in earlier posts the new ways that entrepreneurs are finding creative solutions for helping people fund their divorce. Divorce insurance was one idea, but a woman who was trained as a lawyer and worked in finance came up with another solution. While the idea for divorce insurance stemmed from life insurance, home insurance and other kinds, Balance Point Divorce Funding followed the lead of contingency fee agreements in personal injury litigation.

The founder of the company had gone through a long and expensive divorce of her own after finding out that her former husband had hidden millions of dollars worth of assets during settlement negotiations. While attorneys are prevented by ethics laws from financing a divorce based upon a contingency agreement, third part corporations are not bound by the same rules.

The way that the system works is that Balance Point agrees to fund divorces where the marital assets range from $2 million to $15 million, a range determined to allow for a desired profit margin. In exchange for the advance funding, the client then agrees to pay the company a percentage of the value of the assets awarded to them upon the finalization of their divorce.

While it may seem that couples with marital assets totaling over $2 million may not require financial assistance, many do. Often, women have chosen to take care of the children while their husband ran the business, and when they decide to file for divorce, they find that they do not have the individual finances to adequately represent their interests.

Source: The New York Times “Taking Sides in a Divorce, Chasing Profit” Binyamin Appelbaum 12/4/10