EP 57: Could Novitas help you pay for divorce? Interview with Nicole Noonan, CEO of Novitas US

Do you know how you are going to pay for your divorce? There’s an interesting option out there you may not know called divorce funding. We interview Nicole Noonan, CEO of Novitas US. They provide divorce funding to people for legal fees, expert costs and personal expenses. As Nicole says, “Our clients are asset rich and cash poor."

To contact Nicole Noonan and Novitas US:

http://www.novitasus.com

Phone: (212) 404-7807

Transcript

Shawn: Today we have a very special guest. We have with us Nicole Noonan, the CEO of Novitas, a divorce funding firm based in New York City. Nicole, welcome to the show.

Nicole: Thanks so much for having me.

Shawn: Can you tell us a little bit about your background before we jump into the divorce funding industry?

Nicole: Sure. Prior to getting involved in this I actually practiced matrimonial law for a number of years, and I saw firsthand a need for this. I would have clients that would come into my office, where they were very wealthy on paper, but had no access to cash to retain an attorney, like myself, or access to financial advice. So it was very difficult for them. So after years of practice I said wow, there has to be something else out there. That's when I first got involved in divorce funding.

Shawn: What is divorce funding exactly?

Nicole: Divorce funding basically provides that interim support for clients going through divorces. So in order for them to level the playing field, where one spouse in most marriages has more access to funds than others. We provide funding for legal fees, expert costs, and for some clients reasonable living expenses.

Shawn: When does someone come to you at Novitas? At what stage in the process, and what should they expect?

Nicole: It really varies from case to case. For some people I'm the first phone call they make before they even find an attorney. Some people are finishing up their divorce, but just need that extra bit of fundingto get them through until their house sells. So it varies from client to client, and case to case.

Shawn: Where are you located by the way?

Nicole: We are based in midtown Manhattan, but we do operate throughout the US. Our partners are based out of the UK, so we're sort of an international group.

Shawn: That's great. So if I understand correctly it's very common that we see where one spouse basically controls the finances, and the other spouse may not have been involved during their marriage. So when someone comes to you what kind of thing should they look for to know if they might be a good fit for Novitas, and for divorce funding in general?

Nicole: What we look at when we make a determination of whether or not to take on a client is the total marital asset pool. So in essence, there has to be something to divide. Unfortunately we can't divide furniture, there actually has to be an asset at the end of the day for us to be repaid on. So a client would have to have some sort of marital asset. Unfortunately we can't fund pure custody disputes, or post divorce disputes as well.

Shawn: Right. So you're talking about if they have a house, or an investment account, or something to that effect.

Nicole: Exactly.

Shawn: So ultimately the case is maybe they don't have that money in hand at the moment when they're going through the divorce process, but once the process is over it's highly likely that they'll get a large chunk of that they'll get later.

Nicole: Right. What we say is our clients are asset rich and cash poor. So during a divorce at many stages, at many times your assets are tied up in real estate, and that real estate is frozen. During a divorce you can't have access to it, and you can't have access to those funds. In New York it's very popular to have a lot of money tied up in your apartment. If you own that, and you really cannot access that, it's very difficult if you try to refinance. During a divorce banks don't want to lend when there is a divorce pending. Usually with that only one spouse wants it. So the other spouse would have to sign off, and that's not going to happen.

Shawn: So when someone comes to you for the first time what's the intake process?

Nicole: It varies. Sometimes a client comes to us, sometimes the attorney calls us first. I'm happy to speak with clients, I'm used to it from my practice. I'm happy to answer any questions that they may have about our process. We try to streamline the process as much as possible. Our application is online through a secure site that individuals get access to only after inquiring with us.

Shawn: Got it. How long does it take from the application, assuming that everything checks out, to getting a loan?

Nicole: Well we really try to streamline the process. We understand that people are in a dire situation in some of these cases, so we really try to do it as quickly as possible. From the time we get the application sent to our underwriters they try to make a determination in 72 hours. Of course that varies depending on the amount of information that is provided to us. Once the underwriters decide to approve a client, documents are sent to a client. Once those are sent back to us after 10 to 15 business days money is wired.

Shawn: Got it. Is there a range of funding amounts that you stick to?

Nicole: We have no maximum. For a minimum it would have to make sense for a client, because there is an application fee, and there is a fee on the money. So, again, if it's something that you're just looking to divide furniture it wouldn't make sense to you, same as if you're looking for a couple hundred dollars, or a couple thousand. Which is unusual for a divorce. Many divorces cost much much more than that. It wouldn't make much sense.

Shawn: Got it. Novitas doesn't necessarily provide loans, it's a cash advance. Could you describe a little bit about the difference, and maybe how you get paid back in the end once a divorce is over?

Nicole: Right. So Novitas provides a non-recourse cash advance against the client's settlement. So if they reconcile, which I love to see when clients reconcile, however it doesn't happen that often, we would not get paid at the end of the day because there is no settlement. So it's different than a loan with a mortgage, or something like they, both parties have to sign off on it. With us it does not have to be both parties.

Shawn: So there are cases that you've had where you're out of luck, at least as a business, if things do turn around. But I imagine to prevent those kind of situations you are pretty involved with the attorneys in the divorce process?

Nicole: Yes. We only work with clients that are represented by an attorney, and that's really important to us. We look not only for our clients, but the spouse to make sure that they have retained an attorney as well.

Shawn: That makes a lot of sense. With your experience both as an attorney, and also on the funding side, are there common mistakes that you see people making that are easy to prevent, or easy to avoid?

Nicole: I think it's really important that you gather as much information as possible before the divorce process has started, or even during. Knowledge is power. I really see that every day, where if you don't know where assets are, or liabilities, the amount of money you're owed on your house, that's to your detriment. So it's really really important to stay abreast of what your family finances are.

Shawn: Yes. I think that's extraordinarily important advice. For people who are interested in potentially speaking with Novitas for their situation, what's the best way for them to contact you?

Nicole: Sure. So visit our website at www.novitasus.com, or you could call us (202) 414-7807.

Shawn: Excellent. Thank you very much Nicole.

Nicole: Thank you Shawn. Have a great day.

Shawn: You too.

Thank you!

Thank you for listening to the Divorce and Your Money Show. We hope the show helps you through one of the most difficult periods of your life. Shawn Leamon is also the author of Divorce and Your Money: The No-Nonsense Guide. One-on-one divorce-coaching services are available at www.divorceandyourmoney.com.

If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

Shawn Leamon, MBA, CDFA

Dallas, Texas

Shawn C. H. Leamon is Managing Partner of LaGrande Global, a firm that helps successful families manage large financial transitions like divorce, inheritance and selling a business.

He earned his Bachelor of Arts from Dartmouth College, double majoring in Economics and Philosophy, and his Masters in Business Administration at Spain’s IE Business School.

Before founding LaGrande Global, Shawn helped manage $1.1 billion in client assets at Bernstein Global Wealth Management. He also worked as a credit research analyst at J.P. Morgan. He is a Certified Divorce Financial Analyst, and he has been an advisor to numerous high-stakes divorce cases.

Shawn is the author of two well-received finance books: Managing Private Wealth: Principles, and Divorce and Your Money: The No-Nonsense Guide, both published in 2016.

In his spare time, Shawn is an ultra-endurance athlete and has competed in events as long as 24 hours. He is an Eagle Scout and a member of the Alumni Board of Greenhill School.