Divorce is Latest Investment Vehicle: Is it an Ethical Investment?

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Nearly 10 years into my (very happy) marriage, I know very little about divorce attorneys, and hope I never find out more. But even I know that in addition to being emotionally taxing, the process of getting divorced itself can be very expensive.

Forbes.com says the average cost of a divorce in the United States ranges from $15,000 to $30,000. Most of this goes directly to divorce attorneys, who make fortunes off other peoples' misery. And unlike many legal proceedings and lawsuits, divorce attorneys demand their money whether you win or you lose. In short, a man could get raked over the proverbial coals in court and still have a staggering bill awaiting him, just to add insult to injury -- unlike other types of law suits in which lawyers only get paid if you win. It is, to say the least, cheaper to keep her.

Of course, with the economy in its current sad state, fewer and fewer unhappily married people are finding the funds necessary to get rid of each other. And lawyers' fees aside, the simple cost of living apart while you try to get rid of a spouse is also prohibitive. So what can one do if your husband's getting on your last nerves, but you're too broke to leave? A new, innovative form of divorce financing might help you roll out before you catch a case:

Michelle Pont and her husband amassed millions of dollars in properties and investments from a freight-hauling business that they started with a single stake-bed truck in 1991. They bought a four-bedroom home, then a second home, a vacation home, a motor home and half a dozen cars.

But when Ms. Pont decided to seek a divorce last year, she quickly ran out of money. She had no job. Her husband controlled the family's investments. A few months of legal bills maxed out her credit cards and drained her retirement account.

She wrestled with accepting a smaller settlement than she considered fair. Then a lawyer referred her to Balance Point Divorce Funding, a new Beverly Hills lender that offers to cover the cost of breaking up - paying a lawyer, searching for hidden assets, maintaining a lifestyle - in exchange for a share of the winnings. In October, Balance Point agreed to invest more than $200,000 in Ms. Pont's case.

Lawsuit lenders initially focused on personal injury cases, but over time they have sought new frontiers, including securities fraud cases brought by disgruntled investors, whistle blower claims against corporations and property development disputes.

Divorce cases may be a promising niche for lenders because costs can mount quickly - some top lawyers in Los Angeles charge more than $500 an hour - and because state laws uniformly require plaintiffs to pay lawyers upfront, rather than promising them a contingency fee, or a share of any winnings, as is common in other civil cases.

The state laws were written to make people think twice before pursuing a divorce.

In all fairness, the divorce cases mentioned in this article involve very wealthy couples, typically with several million dollars in marital assets. I doubt any firm is going to finance such a case if the guy (or lady) being sued works at Sizzler. This is, after all, about money. Eff' the institution of marriage, or good taste for that matter. Still, it's a pretty sad sign of the times when you can actually get a loan to help end your marriage. But from the standpoint of a financial investment, it does certainly appear to be one of the safer investment vehicles out there.

Questions:
-Do you think it's ethical for companies to fund investments in return for a share of the "profit" -- in this case a divorce settlement?
-Should the laws be changed so that lawyers are able to take a percentage of the "winnings" in divorce proceedings, as they are in other types of legal disputes?

Leave your questions below!

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