Many family law clients are concerned about legal fees and wonder how to “finance my legal expenses”. This concern can dissuade people from seeking professional legal representation to reduce their legal costs. However, there are different financing options available. Everyone deserves the best legal assistance, and JustFund offers the ideal solution for family law matters.
Key takeaways
Legal fee loans have downsides, including restrictive criteria and high interest over time.
Legal aid helps vulnerable parties, but funds only select cases.
JustFund is the first financer solely for family law clients, addressing a key gap.
Traditional loans charge interest on unused funds; JustFund charges only on used funds.
Our family law professionals tailor financing to client needs.
Traditional lenders are transactional; JustFund is personal and client-focused.
Legal fee loans
A legal fee loan (unlike JustFund) is a type of personal loan specifically designed to cover legal fees. While commonly used, they often come with drawbacks, making them less ideal for many people.
Limited accessibility
Personal loans, including a legal fee loan, often have strict eligibility criteria that disadvantage many family law clients. Divorce can lead to significant income instability, particularly for parties who have taken time out of the workforce to support their families.
Missed career opportunities and reduced earning potential limit access to steady income, making it harder to qualify for funding. Even when approved, these legal fee loans or personal loans often come with less favourable terms, such as a variable interest rate, further compounding the burden of covering legal fees and other expenses. One of the primary benefits of JustFund’s model is its focus on fair and manageable terms, ensuring clients can navigate their legal matters without unnecessary financial strain.
Interest impact
Loans, such as legal fee loans, personal loans, or legal finance, have repayment terms that can last months to years. These loans are often used to cover not only legal fees but also related expenses associated with your legal matter. Clients pay interest on every repayment, which can be a significant burden when your financial future or expected settlement is uncertain. Without fair financing options, achieving a balanced legal playing field can become challenging. Additionally, the longer the loan term, the more interest the borrower ends up paying, adding to the financial hardship.
Family and friends
Some people may turn to family or friends for financial assistance, whether to cover costs like a legal fee loan, personal loan, or legal representation. This is usually an informal arrangement and may seem like a good option to help with the proceedings. However, financial agreements often lack the structure of formal financing options, such as having funds paid directly to legal service providers or tied to an expected settlement. Additionally, turning to loved ones for help may bypass the thoroughness of a loan application process, increasing the risk of straining relationships. It’s best to keep family relationships for emotional support.
Legal aid
Legal support can be crucial for people in difficult circumstances. However, it’s often not viable for many clients. Eligibility for accessing free or low-cost legal services includes a means test and a merits test. Factors such as the size of your property pool or third-party costs associated with your case may exclude you from consideration. Additionally, clients may face barriers due to credit checks, personal reasons, or the inability to capitalise on a financial opportunity to secure other funding, which may also not cover additional costs, leaving clients to find alternative ways to manage their legal fee loan.
Additionally, the Legal Aid Commission may not consider your case substantial enough to warrant funding. In such situations, alternatives like a legal fee loan, personal loan, or legal finance may need to be explored to cover the costs of legal representation. For an Australian citizen, finding an understanding lender who recognises the nuances of family law cases can make all the difference in accessing the support needed during difficult times.
JustFund for your legal fees
JustFund is an innovative addition to the legal finance sector, redefining how family law clients access financial support. Its approach brings new ideas that resolve the issues in traditional funding arrangements, such as legal loans. Here’s what sets JustFund apart from other funding options.
Family law focus
JustFund assists parties in family law matters involving property settlements. We are the first credit provider in Australia to focus solely on family law clients, filling a large gap in legal funding. Family law presents specific issues that clients must contend with.
Divorce may come with particular financial challenges. The repercussions of divorce are often significantly larger on one spouse over the other. When one party has greater access to financial resources, the chance of a one-sided outcome increases. Our financing solution, including options like a legal fee loan or leveraging a property settlement, empowers clients to face the legal process without the financial burden.
Line of credit vs personal loans
JustFund doesn’t offer loans like other lenders. Our funding is provided as a line of credit. What’s the difference you might ask?
What is a personal loan?
A legal fee loan provides the borrower with a lump sum to use as needed, offering flexibility in covering legal costs. With each repayment, interest is calculated on the remaining principal, even if the borrower doesn’t use the entire amount. Borrowers, including permanent residents, usually need to pass a credit check as part of the approval process. It’s common for lenders to levy an early repayment fee to compensate for losing out on future interest payments. Exploring different payment options and reviewing comparison rates can help borrowers identify the most cost-effective loan for their needs.
Why is a line of credit better?
A legal fee loan or line of credit makes funding legal bills much easier. The client doesn’t need to worry about managing these finances. The funding is made available to the law firms nominated by our clients. Funds are released as invoices come in, based on the loan amount and agreed loan term. The client will only pay interest on the funds that they use. This is an inherently fairer system that keeps the client’s costs to a minimum. The credit line is repaid from the proceeds of the client’s settlement after it’s finalised.
Eligibility criteria
We know that legal loans, including unsecured loans, are offered based on a borrower’s financial circumstances. Lenders typically avoid providing funding to individuals lacking a stable income or those with poor credit histories. These loans often come with additional administration fees and higher interest rates, which can add to the financial strain. How does JustFund improve on this model to benefit clients?
We don’t begin with a client’s credit history or financial situation. We begin with the merits of their case. We want to know what their needs are and how our funding can help. By considering factors such as the asset pool involved, we aim to address the financial asymmetry that is a part of many family law issues. This approach allows us to help those who would otherwise face rejection by traditional lenders. Additionally, we offer competitive interest rates and encourage clients to compare interest rates to ensure our solution is both accessible and fair.
The benefits of in-house expertise
When you apply for a standard personal loan or a legal fee loan, you’ll often deal with financial advisers who lack specific knowledge of family law. This can lead to advice that doesn’t align with the unique challenges of legal proceedings or fails to address the complexities of a legal loan tailored to your financial situation. One of JustFund’s greatest points of difference is the makeup of our team. JustFund is comprised of experienced family lawyers and financial technology experts, ensuring that our solutions are designed with family law expertise and an understanding of lender’s requirements. Why is this so important?
Our law professionals have decades of combined legal experience and a deep understanding of the financial requirements of legal assistance. They can accurately assess your needs and provide a line of credit or loan that suits your family law matter. This approach ensures you can borrow money in a way that aligns with your circumstances and financial stability without the limitations often imposed by multiple lenders. Unlike traditional options, our tailored financing solutions enable you to focus on resolving your legal issues without unnecessary stress about how to pay for them.
Empathy
Empathy is often missing from legal financing. A lack of compassion is innate to the traditional funding model. Most lenders, focusing solely on asset-based lending and requiring proof of regular income, take a transactional approach. This often results in a one-size-fits-all system with variable interest rates, making it difficult for clients to manage court fees. There is little room for personalised support, tailored loan solutions, or an understanding of how to help clients cover their unique legal needs. At JustFund, we prioritise compassion and customise our services to meet your specific requirements.
JustFund takes the opposite approach. Our funding is client-centred. We focus on reducing financial stress. Our team wants to know your individual circumstances so you’re empowered to receive the best possible representation.
Conclusion
Financial instability shouldn’t be a barrier to effective legal assistance, especially during challenging times such as parenting matters or a relationship breakdown. While court costs and other fees can seem overwhelming, financing options like a loan are available to help clients pay for the legal assistance they need. There are several funding avenues, but JustFund’s financing model stands out as the fairest and most low-cost option for family law clients, ensuring access to justice without unnecessary financial hardship.
The Team at JustFund were amazing! At a time when I was struggling, emotionally & financially, Andy & his Team offered me a solution that would ease my financial worries & let me concentrate on preparing for my legal case.
Apply for funding today.
