When a couple is going through a contested divorce, things can get very costly, very quickly. When one spouse controls all of the family's money, the other may be left with very little with which to fight for child custody, child support, the property division, or any other matter inherent in a divorce. This is the thinking behind Balance Point Divorce Funding, a new California business which lends money to prospective divorcees so they can pay attorneys and court costs, maintain their home and lifestyle, and relieve a little of the massive stress that comes with a difficult divorce process.

Balance Point was created by Stacey Napp, a lawyer who got the idea for the ground-breaking business after her own difficult divorce (which also gave her the funds to start the company). Unlike other civil cases in which an attorney can be hired on a contingency fee basis, attorney ethics laws prohibit lawyers from taking divorces under such a fee agreement. Further, state laws require attorney fees to be paid upfront, which can be a difficult hurdle for divorce clients.

Therefore, Napp says, there was no way for someone who was struggling financially to retain an attorney or to pay any of the other bills that so quickly mount during a divorce, often forcing the party with less money to settle for less than she deserved under the law simply so she can put money in the bank. "Everybody knows somebody where at the end of the day, the divorce was not equitable," she said. "We want to help those people, the underdog, to make sure they get their fair share."

We will continue our discussion of this entrepreneurial new idea later this week.

Source: The New York Times, "Taking Sides in a Divorce, Chasing Profit", Binyamin Appelbaum, 4 December 2010