Many readers may be familiar with Nicole Noonan and her company New Chapter Capital. Even more so recently after Therium announced they had acquired her company. Nicole spoke with Funding Litigation to tell us more about the industry and her journey.
Divorce funding, as a concept was started in UK in the early 2000’s. As in the UK, American divorce lawyers are not allowed to represent a client in exchange for a share of a portion of their settlement they secure (as opposed to charging a fixed fee). Such arrangements, it is feared, would fuel the flames for nastier divorces. However, such rules do not prohibit third party financing.
Divorce funding is designed to provide liquidity so that no one is forced into a settlement less than they deserve. Both men and women turn to third party financiers during a divorce so they may be empowered with funding. One such financing group founded by Nicole Noonan, a former family law attorney who leveraged her visibility as a divorce expert to found New Chapter Capital, Inc., a New York-based organization that will provide funding to individuals engaged in divorce proceedings. “My goal is to help level the legal playing field by providing equity through equity” stated CEO Nicole Noonan. Before pioneering the divorce funding market, Noonan saw the need for funding first hand with her matrimonial clients who often do not have the liquidity to engage in divorce proceedings or to afford living expenses such as mortgage payments, school tuition and other personal costs during the proceedings.
“Divorce funding levels the playing field, enabling litigants to fund their attorney and expert fees while maintaining their standard of living,” says CEO Nicole Noonan. As the leading provider of matrimonial resolution funding, New Chapter Capital empowers clients by providing a facility where there is an imbalance in matrimonial resources. As no two divorces are alike, client are evaluated on a case-by-case basis to determine the need. There is the possibility of a lost investment in cases that do not resolve the way in which funders predict. That depends on underwriting and experience in the industry. However, Noonan explains with complete confidence, “If you do your due diligence, it shouldn’t be an issue.” New Chapter Capital has developed a proprietary underwriting system, which mitigates these risks.
Now that “no fault” divorce is available in every state, divorces are no longer taboo and are common among our society today. No longer does one spouse have to point fingers at the other and cry “adultery” or “abandonment.” What is also commonplace is disparity of resources between spouses. Some spouses hide assets, report lower income or have a wealthy family to bank role a divorce, there is a potential for an uneven playing field. Even the wealthiest of individuals maybe financially “cut off” by a bitter spouse.
Divorce funding is unlike a home mortgage wherein both spouses have to agree, it can be time consuming and there are no guaranties it will be approved especially in the midst of a divorce. Distinct from credit card payments, no repayments are made until a settlement is reached. Divorce funders can provide an alternative facility as a cash advance, giving qualified spouses lines of credit that help them pay legal costs, expert fees, and living expenses while they work toward a fair divorce settlement. It is an increasingly popular product that can help divorcing spouses find hidden assets, ensuring a more secure financial future for themselves and their children.
Certainly the need for divorce funding is not isolated to one state or region. It is needed throughout the country. NCC works with clients throughout the US with a view to expanded into Canada in the near future. It is a win-win situation, from the client’s perspective they are able to retain top quality attorneys and experts, while the attorneys are able to take on paying clients and not have to carry receivables. These arrangements provide access to justice opportunities for people who would otherwise not be able to afford them.