We wanted to share this interesting piece we found in The Guardian on “divorce lenders” in the US and UK.
These financiers are capitalizing on the high US divorce rate by lending money to the “non-monied spouse”, at a high interest rate, so that she (or in some cases, he) can pay for legal fees and living expenses until the divorce is finalized.
It’s an intriguing idea, and addresses a problem that exists here in Canada as well. Often, the “have not” divorcing spouse does not have sufficient credit to borrow a large sum of money. Since the family home is typically in both spouses’ names and may be subject to an asset restraining order, a bank will not agree to re-mortgage the home or provide a line of credit secured against the house unless both parties agree (which is unlikely). The result is that many “non-monied” spouses do not have sufficient funds to hire a family law lawyer, leaving them to navigate the legal system on their own, which can be confusing, stressful, and time consuming.
You can find the full Guardian article here, and decide for yourself whether there’s a place for divorce lenders in Canada.