Divorce Is A Lucrative Business

March 18, 2016 in Daily Bulletin

The Economist wrote about an industry that hopes you stumble in your quest for true love:

  • Financiers offer loans to individuals seeking a divorce to cover legal costs.
  • In exchange the financiers get a cut of the assets that a party wins from the divorce.
  • The loans themselves typically have interest rates of 18% and are usually worth about a third of the expected payout.
  • In New York one firm’s average loan is for $306,000.
  • The biggest problem is when a couple aborts divorce proceedings and decides that they were right the first time, and stay together. No divorce means no sold assets, and no return on investment.
  • The firms point out that parties in a divorce would probably have to settle for much less if they couldn’t afford the high end lawyers that the loans allow.

Read more here.

Source: The Economist