“The non-moneyed spouse, who cannot bear the cost of the battle, often 'surrenders,' reluctantly [by] agreeing to a sub-par settlement,” she said. “He or she can’t afford the steadily mounting bills or the stress of protracted litigation with someone who can afford to litigate a case to death.”

Stutman agrees with Noonan that divorce funding gives the borrower the wherewithal to go to court if needed without worrying that their professionals will be concerned about payment. However, that is not necessarily to the advantage of the divorcing spouse, he asserted in response to her argument.

“Divorce funding is good for the lender, [and] it's good for the attorneys and other professionals who are being paid,” Stutman said. “Other than that, a divorce funding loan is the epitome of a 'subprime' [mortgage] loan and we all know how those worked out [during the Great Recession].”

Noonan concedes that divorce funding is not necessarily the best option for all clients. But for those who need it, she stated, divorce funding can change lives.

“The funds do come at a cost and some clients may find more cost-effective payment options available,” Noonan said. “Additionally, as funders we do require the attorney to update us, and at settlement, we have priority to be repaid. Lastly, once you sign with a funder you cannot choose to represent yourself as client going through a divorce. Notwithstanding, divorce funding has allowed clients and their representatives to attain the best possible result in divorce settlements. The funding has empowered our clients.”

But Stutman had the last word on the subject. In his opinion, divorce funding in New York state will continue to be a financial strategy of last resort that divorcing spouses will come to regret if they opt for it.

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