EP 222: Divorce Funding with Nicole Noonan, CEO of New Chapter Capital, Inc.
To get in touch with Nicole Noonan, visit newchaptercapital.com or call (212) 404-7807. Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.
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Shawn Leamon: All right. Today we have Nicole Noonan. She is the CEO of New Chapter Capital, which is a firm that deals with a topic we haven’t covered in a while, but a very important one, which is divorce funding. Nicole, welcome to the show.
Nicole Noonan: Thanks so much. Happy to be here. Yeah.
Shawn Leamon: Why don’t you tell us what New Chapter Capital does? What is divorce funding? What does that mean?
Nicole Noonan: So New Chapter Capital and divorce funding provides liquidity for individuals going through a divorce, that would not otherwise have access to it. So we provide an advance against the potential settlement. And the advance can be used for legal fees, expert costs, and for living expenses.
Nicole Noonan: And this is something that I saw, in my own practice, a real need for, where one spouse had more money than the other. And they cut up their credit cards, and try to back them into taking a settlement less than what they’re entitled to.
Shawn Leamon: And so, to simplify, I mean, liquidity is money. So you’re giving them the funds to get through the divorce process.
Nicole Noonan: Exactly. Yeah.
Shawn Leamon: And the objective then is to level the playing field, it sounds like.
Nicole Noonan: Right, right. So they can go out and hire the right attorneys, the right experts. We don’t want someone to have, I’m going to use a generalization, their husbands go out. They’re the money, the bread earners. They’re going to go hire top counsel for the divorce.
Nicole Noonan: And the wife is going to have to go borrow money from friends or family and go hire someone who’s fresh out of law school. And this is their first divorce case. We don’t want that. We want them to have equal representation. And that’s what they’re entitled to.
Shawn Leamon: Yeah. So I think a lot of people, I mean, anyone who’s not the primary breadwinner in the house, if there is one, probably is at a pretty significant disadvantage, at least from my experience, in terms of having the available money to go and start paying legal fees.
Shawn Leamon: I was just talking to someone yesterday. And they had some money in savings, but basically drained all of it within the first month or so of the process. How does someone know that they’ll be a good candidate? How do you figure out whether they should contact you? Kind of gives me the overview, as someone should evaluate kind of this divorce funding, versus using credit cards, or borrowing from family and friends, as you mentioned. How does someone think about that?
Nicole Noonan: Yeah, no. So, we always say, people save for their wedding. You plan for the wedding, the dress, the cake, the caterers, the band. So when it comes time to divorce, no one’s sitting there planning for a rainy day divorce. So if you don’t have access to your own money, you’re going to have to go to friends or family, potentially, or you’re going to have to take out credit cards.
Nicole Noonan: Now, that being said, not everyone needs to have an attorney. Not everyone needs full-blown litigation. I always say, it’s best to sit down with your spouse, if you can, open up a bottle of wine, have dinner. And say, “Hey, these are my 10 non-negotiables. What are your 10?” And hash it out as much as possible. Because you’d rather send your child to college than send your attorney’s child’s at college.
Nicole Noonan: But that’s not always a possibility. That being said, if you’re fighting over … There’s case law, very interesting things. I get it for animals. People want to fight over animals. But fighting over your baseball card collection, or your Nintendo set. Or fighting over something with no value, it’s really not worth putting a fight on something like that.
Nicole Noonan: So what we say is, if there’s an asset, usually it’s a house, and how it’s going to be divided. And if you can’t work it out, or if there’s a custody dispute, and you can’t work it out, then you’re probably going to need to retain some sort of expert, whether it’s an attorney or a mediator. And at that point, it’s going to be divided. The money’s going to be divided.
Nicole Noonan: And that’s when we come in. That’s where we can say, “Hey, okay, let’s figure out what you’re going to be entitled to, and what we can potentially advance you.” So you can go in and, unfortunately, sometimes have that fight with the attorneys, and the accountants and whatnot.
Shawn Leamon: So what stage then are people normally coming to you, or do you normally help people? Are these people who are at the beginning stages of the divorce? So still literally may be at the kitchen table, and haven’t really started the process yet, in some cases. Or are they generally kind of early or midway through the process? How does someone know the timing, in terms of when to contact you?
Nicole Noonan: Yeah. Shawn, I’ve been doing this for 15 years, between my own practice, mediation, and for divorce funding. So I get people from all over the country at all stages of the divorce, whether they’re looking to say, “Hey, I’m looking to hire an attorney in California. Who would you recommend?” Now, I don’t give them one. I give them a list of people.
Nicole Noonan: And then they may come back to us and say, “Hey, you know what? I want to hire Joe something such, and I want your funding. Let’s start an application.” There are also the people that are on the eve of trial. And I get a call from an attorney saying, “Hey, we thought this was going to be a $10,000 case. Looks like going to cost another $30,000 to take it to trial, because no one’s settling at the courthouse steps.” That’s when we come in. So, really, it depends on the case.
Shawn Leamon: And does someone need to have an attorney as part of this? Or if I’m going through the process representing myself, or more or less by myself, am I a candidate for funding?
Nicole Noonan: Yeah, no. You have to have an attorney. We don’t represent any people that are representing themselves. Yeah.
Shawn Leamon: Okay. No, no. Fair enough. So let’s say I figure out that there may be an option for me to get some funding. How does the process work?
Nicole Noonan: Try to make it as simple as possible. Because, honestly, money is stressful. Divorce is stressful. So talking about money and divorce is super stressful. So we send an application to the firm, to work with the client and the firm, of what they’re looking for in terms of funding, and what the marital asset pool is. And the reason we send it to the firm is it’s not their first rodeo, but it’s potentially the client’s first rodeo.
Nicole Noonan: Documents are sent to us. It goes to our underwriters. We try to make a decision as quickly as possible, again, because it’s a stressful time. So usually within three business days, unless we’re asking for more documentation. And, of course, the more complex the divorce, the longer it may take. But, traditionally, it’s three business days.
Nicole Noonan: Once the client’s approved, documents are sent to the client. We do ask the client to review it with an independent counsel. So it does not need to be a matrimonial attorney, cannot be the matrimonial attorney you’re using, but it can be any attorney that’s practicing within your state. Documents are then sent back to us. And the whole process can be done in as little as two weeks.
Nicole Noonan: Usually, the longest portion of it takes place when we’re trying to find counsel to review the documents with you and get them in, especially in light of the time we’re living in right now.
Shawn Leamon: And I’m going to make up a very low number, but just for the sake of example, if you were to lend me $100 … The divorce process could be another month, or it could be another for three years. When do I have to pay that money back?
Nicole Noonan: When you settle. So we get it. Unlike a credit card, we have to worry about monthly payments. We understand. I mean, I’ve been doing this for a very long time. And the people I work with have been doing this for a very long time. It may take two years to sell a house right now. So you may decide, “I’m going to get 50% of the house. You’re going to get 50% of the house.” And we’ll have to wait until you get the house sold.
Nicole Noonan: Unlike a law firm, where they’re not really willing to wait. And if they are, it’s also not great. And as an attorney who’s done this before, where we would say, “Okay, well, we’ll carry this case. And hopefully, at trial, at settlement, we’ll get repaid.” And it takes another two years, three years, especially during the housing crisis, for us to get repaid. So it’s not great business for law firms.
Nicole Noonan: But let them do what they do best, let them represent you. And let us fund you, so you take the pressure off them and the pressure off yourself.
Shawn Leamon: And then is there an interest rate? Or is it a fee? Or how do you kind of charge someone? How do you make money, basically, is what I’m asking? How’s this all work?
Nicole Noonan: No, I’d love to do this as a charity. And honestly, that’s my next chapter, and my new chapter is hopefully being able to give back. Because I just think that there’s such a need for this, for people who don’t have a lot of assets, but that really need funding to get them to their new chapter and move on.
Nicole Noonan: But we do. We have a monthly fee. But nothing is due until you get to settlement. So they don’t have to stress about that. No.
Shawn Leamon: Got it. And so when do you finally get to a settlement, or there’s an order or something, the papers are signed, and as the assets are getting moved from one place to another, is when your repayment?
Nicole Noonan: Exactly.
Shawn Leamon: Got it. How does someone know if they’re … One of the common issues that comes up with a lot of my clients, is people have different levels of their credit, let’s just say. Some people have done a great job, over time, maintaining that credit. Others are in between. How do you manage or navigate that process, if I’m kind of looking at my options?
Nicole Noonan: Yeah. So we do do a credit check. That being said, we get it. I mean, we get that not everyone has built up their own credit history, because their spouse was the one who did all the banking, was the main breadwinner, and was the main signee on their credit cards.
Nicole Noonan: We do have other people that have been experiencing job losses or unemployment right now, and they just can’t maintain that level of credit. Again, we get it. So it’s not something that is our main decision-making standard, for divorce funding.
Shawn Leamon: And you mentioned something important, is oftentimes if you need funding for your legal fees, you may also need funding just to sustain life. Does your funding include or allow for use for fees that are outside of your attorney?
Nicole Noonan: Yeah. No, absolutely. So we understand. First and foremost, we want to make sure you’re able to get this divorce done. So we want to make sure that your attorney and your experts are paid. So whether that’s a forensic accountant, anyone that you’re going to need, an appraiser, someone who you’re going to need to get your divorce settled.
Nicole Noonan: But we also fund for living expenses for clients. So we want to make sure that, based on what our assessment is, you’re going to need X amount. And if there’s anything left over, we’ll say, “Okay, if you would like to draw down, we will fund for living expenses as well.” Because some people just need to move out. And they need to get a new apartment. Or they need to have money to go back to school, so they can start their new chapter.
Nicole Noonan: Sometimes the most rewarding fundings that we do is people come back to me and say, “Hey, I went back to school. I got a degree. And I’m starting a new job. And I’m on my own two feet. And I’m never again going to let someone maintain a bank account, and know nothing about my finances.” So those are really sometimes my favorite fundings that we do.
Shawn Leamon: You’re based in New York. Right?
Nicole Noonan: Correct.
Shawn Leamon: Yep. I’m in Texas myself, as many of the listeners know. But we have people from all over the country. Where do you work? Can any state apply, or almost any state?
Nicole Noonan: Yep. We’re all over the US. So we’re both East Coast, West Coast, Midwest. We’re there. And my biggest hurdle is for people to know that we’re there,
Shawn Leamon: And what’s the best way for someone to contact you?
Nicole Noonan: So we have a website. It’s New, N-E-W, Chapter, C-H-A-P-T-E-R, Capital, C-A-P-I-T-A-L, dot com. You can also find us on LinkedIn. We also have an Instagram, @divorcefunding. We’re all over. But yes, New Chapter Capital is probably the best. Or they can call us, at 212-404-7807.
Shawn Leamon: Well, Nicole, thank you very much for coming on. I think it’s a great option. It’s one of the biggest and most common topics that I speak with people about, is trying to figure out what options they may have, in terms of getting money to fund the legal fees. Particularly, if they have a spouse that has been manipulative or controlling, or just kind of limiting access, as you started the conversation with. So I think it’s a great product and service that you offer. And thank you very much for coming onto the show.
Nicole Noonan: Thank you so much. Really had a great time.