Crowdfunding, creative financing help people get divorced

Crowdfunding, creative financing help people get divorced

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It was only a matter of time that crowdfunding would start helping people finance a different kind of business: their divorce.

People often contribute money toward a wedding. Now they are being asked to contribute toward the divorce.
People often contribute money toward a wedding. Now they are being asked to contribute toward the divorce through crowdfunding.

SAN DIEGO, Sept. 1, 2015 – The concept of crowdfunding is not entirely new. Investors have contributed small amounts of money to help finance large projects long before the Internet came along, but they were mainly nonprofit efforts such as restoring the Statue of Liberty.

Today, crowdfunding is being used to finance business ventures, education, medical needs, and celebrations like weddings and honeymoons. According to The Crowdfunding Centre website, which tracks crowdfunding worldwide, crowdfunding projects raise $2 million every day. As of July 31, 2015, there were over 20,000 active crowdfunding projects. Over half of them were in the United States, more than 12,000 compared to the second most active location, the United Kingdom, with approximately 2,300.

It was only a matter of time that crowdfunding would start helping people finance a different kind of liberty: their divorces.

Statistics about the average cost of a divorce are difficult to pin down, in part because the issues involved in a divorce can vary so much from couple to couple. According to Forbes Magazine and several legal websites, the generally accepted figure for a divorce that goes to court for any reason (a litigated divorce) is between $15,000 and $30,000. But it can be considerably more if the parties involved decide to go to war with each other.

This is a great deal of money for the average person, which is why so many divorces end up being handled without an attorney. This is not necessarily a smart idea, as critical issues can be overlooked, or one party can bully or threaten another. But if you don’t have the funds, what do you do?

Crowdfunding operations recognized the potential for offering their services to people seeking a divorce who need help with the fees to pay an attorney and whose options otherwise are limited if they don’t have family, friends, loan options or other sources of money to rely on.

One of the many crowdfunding sites popping up to help individuals finance divorce proceedings.
One of the many crowdfunding sites popping up to help individuals finance divorce proceedings.

Sites include CrowdDefend, and, all of which focus on crowdfunding for legal matters. Standard crowdfunding sites such as FundRazr, GoFundMe or Kickstarter see their share of efforts, too. FundRazr has a legal category; WikiLeaks used the site to help fund the legal defense of founder Julian Assange.

Before addressing whether this idea is feasible, consider these issues first.

  1. What does an attorney advise about your options and about the merits of going to court? Most attorneys offer affordable consultations to assess your case. These are worth the fees involved to determine whether your case has merit from an impartial, experienced professional. Get several opinions if you need to, then be smart and accept their opinion and proceed accordingly.
  2. Find out what it will really cost to litigate your divorce. The costs go beyond hiring an attorney. Additional costs may include hiring an investigator, financial experts and other witnesses, and other fees. Setting a realistic price tag may make you think twice about the expense and consider alternatives.
  3. If you decide to crowdfund, do you have the energy and internal fortitude to get into the sales and marketing pitch for your campaign? You can’t just set up a crowdfunding account and then sit back hoping money will roll in. Hope isn’t a strategy. You have to shout it from the rooftops. Are you prepared to open up your situation, your emotional dirty laundry and your self-respect to family, friends, co-workers, neighbors, and your internet savvy children to your situation?

Do you want to go down this road? People have a hard enough time funding honeymoons. Unless they are close to you or you have a particularly sympathetic story which will provoke a lot of outrage on your behalf, this sort of campaign is likely to rub a lot of people the wrong way.

The public aspect of crowdfunding is especially problematic to me. Think twice if you have children. The long-term emotional harm of being spectators to your situation with your spouse isn’t worth it, especially if the result is years of therapy to cope with it all.

There is also a growing number of divorce funding companies that provide loans. Novitas, a British-based company, recently opened for business in the United States. Novitas and similar companies, such as BBL Churchill Divorce Finance, provide an advance and charge interest rates of 12 to 18 percent annually (1 to 1.5 percent per month). Other firms, like Balance Point Divorce Funding, take a cut of any settlement, in the 25 to 30 percent range. These firms say they help their clients level the playing field against a spouse who may have more assets, forcing them to think twice and come to a settlement out of court rather than run through all of their funds fighting it out.

It is far better for everyone involved to avoid going to court for divorce. Couples should exhaust their options with the different types of alternative dispute resolution. Mediation is one method. Collaborative divorce is growing in popularity as a more sensible, humane method of divorce for good reason. Couples can work out their disputes with experts with less potential of running up outrageous bills they cannot afford to pay. Often, couples who think they can’t possibly come to agreement on anything are surprised how effectively their case can be resolved, as long as they both pledge to work hard and participate in the process.

Myra Chack Fleischer serves as Lead Counsel for Fleischer & Ravreby in Carlsbad, Calif., with a focus on divorce, property, custody and support, settlement agreements, mediation, asset division and family law appeals. Read more Legally Speaking in Communities Digital News. Follow Myra on Twitter: @LawyerMyra. Fleischer can be reached via Google +

Copyright © 2015 by Fleischer & Ravreby

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