ABC News’ Linsey Davis reports:
As many people are well aware, divorces can be expensive, during a time when your assets might be frozen and your money supply cut off. Enter Nicole Noonan, 34, the woman the New York Post calls the divorce “fairy godmother.”
Noonan is a former matrimonial attorney-turned divorce financier, working for the company BBL Churchill, a divorce financing and funding business founded by Australian lawyer Brendan Lyle.
Noonan says her job is to throw those going through a divorce a financial lifeline, with BBL Churchill providing loans to help pay living expenses and to fund a good divorce lawyer.
“My ex-husband controlled all of our marital finances, and it wasn’t until we started the divorce proceedings and the bills started piling up that I realized how powerless I was,” said one female client who got a loan through Noonan’s company but asked to remain anonymous because she’s still going through a divorce. “Having that loan from Churchill gave me funds to support myself, but it also gave me a tremendous amount of confidence.”
This woman is among the dozens of clients Noonan says BBL Churchill has taken on; people who are considered asset rich but cash poor.
“They do have assets but they’re coming to them in the future,” Lyle, CEO of BBL Churchill Group, told ABC News. “What we’re trying to do is bridge that gap and let them get some capital and some money now.”
The typical loan is about $250,000. The firm charges between 12 and 20 percent interest.
“We get paid at the end of the day,” Lyle said. “We get paid out of the sale of a property. We get paid out of a split in the IRA.”
While some critics say the concept only drags out the process and could cost a client even more money, divorce attorney Regina DeMeo calls it genius.
“If you have filed a petition and at the same time you need to start paying rent somewhere and you need to start financing your living expenses, you need to find a treasure chest somewhere,” DeMeo said. “I see that every single day. People will settle because they simply don’t have the money to fight.”
That, Noonan says, is where she comes in.
“It levels the playing field for our clients,” Noonan explained. “It gives them the ability to go into court, to not be backed into a settlement that is less than what they deserve.”
But there might be some pitfalls to the divorce tactic, as well, ABC News legal analyst Dan Abrams says.
“I want to make sure this doesn’t just lead to more people fighting it out,” Abrams said. “The ultimate goal should be a settlement and to get it done with. And my concern is that people who have these loans out there are going to want to fight it out and fight it out because they’ve got money at stake now.
“Divorces are so personal. You forget about that. This is looking at it strictly from a business perspective. As a business, it’s a good idea. But on a personal level, there are some real dangers.”
The company says it has an array of clients, the majority of whom are women, and they’re not just millionaires, but also include people next door.