Divorce Mediator Gerald Maggio Checks the New Trend of Divorce Litigation Financing

Orange County, CA (Law Firm Newswire) February 20, 2015 - Early this year, Forbes published an article encouraging those who cannot afford the cost of divorce litigation to consider turning to financing firms that specialize in divorce litigation.

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But according to divorce mediator Gerald Maggio, the existence of these firms simply underscores the spiraling costs of divorce litigation, and he notes that the financing process is not often appropriate for American couples.

“The cost of litigated divorce has gotten out of control,” said Maggio, who practices in Orange County, California. “Although most individuals involved in a litigated divorce face attorneys' costs of tens of thousands of dollars or more, divorce financing really only makes sense when hundreds of millions of dollars are at stake in the divorce itself.”

Divorce litigation financing can come in many forms. Some firms choose to invest money up front in the case in exchange for part of the settlement. Other firms give out loans directly to divorcing parties, which can stretch into the hundreds of thousands of dollars to cover the costs of divorce litigation.

A recent report in Reuters indicated that interest rates on divorce loans often range from 16 to 19 percent.

Maggio says that divorcing couples with significant assets often do not realize that alternative forms of divorce can be used successfully even when the divorce is financially complex.

“The only time litigation has an inherent advantage over mediation or collaborative divorce is when one of the spouses is hiding major assets,” said Maggio. “Otherwise, all divorcing couples, including those with significant financial complexity, should look into mediation or collaborative divorce, even if they believe that the divorce will be difficult or acrimonious. Mediation is built to manage conflict. Litigation rarely does anything other than escalate it.”

California Divorce Mediators
Main Office
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Irvine, CA 92602
Call: (949) 553-0911

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Riverside, CA 92501
Call: (949) 553-0911

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