FUNDING YOUR REPRESENTATION:
PRACTICAL APPROACHES TO PAYING LEGAL FEES
Simply being involved in a legal proceeding can be stressful enough. Adding the financial component into the equation can cause even further anxiety. Not surprisingly, this is a very common concern among prospective clients, as well as current clients actively involved in lengthy litigation – my point is this: you are not alone; you are not the first person to encounter this obstacle and you will not be the last. As a Director of Client Relations, I regularly hear about the financial hurdles that clients face, and the reality is that those issues can arise at any stage of a case. That said, I also get to hear about the creative solutions clients have successfully used to pay their legal fees and I felt a comprehensive list would do a lot of people a good service. So, whether you are a prospective client looking for financial assistance to hire an attorney or you are already an active client needing to continue representation, check out these practical approaches to paying legal fees. After all, there is already so much to focus on in your case – funding your legal representation shouldn’t be overwhelming.
Now for a brief, gratuitous disclaimer: All content contained herein is meant for informational purposes only and is explicitly not meant to be construed as legal or financial advice. The choice to retain legal representation and how you choose to fund your representation are both entirely within your discretion. You are encouraged to conduct your own independent research to determine the solution that will best fit your situation.
FIRST THINGS FIRST:
Know your goal(s) and desired result(s) from a legal proceeding. Then decide how valuable those goals are to you, or more importantly, how much money you are willing to spend to achieve those results. Some goals have intrinsic value and are more difficult to place a dollar amount on, like getting more visitation with a child or getting out of a toxic marriage. Others are easier to put a price tag on, such as a Landlord needing to sue a Tenant for damages to the property. The point of this exercise is to establish a very clear picture of what you want out of the representation, and how much it’s worth to you – this helps to do two things: 1. It keeps you focused on achieving your goal and 2. Helps determine if it is economically viable to pay (or continue paying) for legal representation, i.e. are you spending more on attorney fees than the value you placed on your goal?
FRIENDS & FAMILY:
This may seem like somewhat of an obvious choice, but the fact remains that borrowing money from a friend or relative is one of the best ways to cover legal expenses. Your credit score doesn’t matter and most times you can get the lump sum needed to hire an attorney that you can re-pay over time and avoid exorbitant interest rates. While it might be an awkward conversation to initiate, chances are it won’t be as uncomfortable as you think. So, assuming your legal goal is of high importance, put your pride aside and ask for help! (that’s what Grandmas are for) Be professional, yet sincere; have a few options laid out with re-payment terms/timeframes, you could even offer to prepare a Promissory Note. More than anything, be sure everyone is on the same page and you are agreeing to terms that you can actually meet.
Regardless of the source of your financing, always ask for more than you think you need. It may seem a bit counterintuitive, but Murphy’s Law tells us that anything that can go wrong, will go wrong. While obviously an exaggeration on Mr. Murphy’s part, the concept is sound: expect things to go wrong, expect things to take longer and to cost more – then when it doesn’t, you will be pleasantly surprised.
If borrowing from friends and family is simply not an option, or if you’re just too stubborn to ask, seeking personal financing is probably your next best bet. There are many avenues for obtaining personal financing, but before we get into those nuances, you need to have a clear picture of your Credit Score. A great place to start is Credit Karma – a free website, with mobile app, that shows tracks your Credit Score as reported by TransUnion and Equifax. Beyond just showing your Credit Score, Credit Karma also provides great detail into what is affecting your score and tips to improve your score over time. It gets better! Once you have a good understanding of your Credit Score, the app also compares your credit profile with other users to help compile various offers you would likely qualify for and it provides an unbiased “pros and cons” of each offer. Regardless of your situation, in general, it’s not a bad idea to check in on your credit score at least once a month. Credit Karma is not the only free resource out there, but it does have very robust functionality and provides clarity to an otherwise confusing topic.
Look, I get it – when I was growing up, I was always told to stay far away from credit cards; no good can come from them! While this was probably good advice for teenage Me, I have noticed a general stigma around this type of personal financing. This apprehension is not entirely unfounded, and the truth is credit cards can be a very slippery slope into debt and a poor credit score. Credit Cards are sort of like guns; they should always be handled responsibly, kept out of reach of children, and you really shouldn’t whip it out every time you walk into a store. That said, when used appropriately, credit cards can provide a lot of breathing room for making larger purchases, all while staying within your monthly budget. Be smart about it, do your research and be honest with yourself – will it be too tempting to have access to a large line of credit? Having a single, specific purpose for a credit card (like paying for attorney fees) can go a long way toward managing your credit lines responsibly. If you are considering getting a credit card, explore some of the expansive rewards programs out there, such as airline miles, hotel/travel rewards, or cash back. Make the most out of an unpleasant situation and turn paying attorney fees into investing in a future vacation.
Keep an eye on these key categories when comparing credit card offers: Application Process, APR, Annual Fees, Late Charges, Minimum Payments, Introductory Rates, and Loyalty Points/Rewards.
Like credit cards, personal loans can help cover large out-of-pocket expenses immediately and allow you to repay over time, in affordable monthly amounts. Often the initial Retainer Fee, your start-up cost to begin the representation, is just simply more than you can afford on short notice and odds are your legal issue needs immediate attention. As with credit cards, personal loans are not to be taken lightly – do your research and make sure you are committing to terms and conditions you can fulfill. With some careful analysis and a good understanding of your options, you can get the right legal representation, right away. Click here for more information on best practices for comparing personal loans.
Key categories to look at when comparing loan offers: APR, Interest Rate, Early Payment Penalties, Principal Amount, Monthly Payment, Term Length, Late Fees, Processing Fees, Application Fees, and Minimum Credit Score.
HOME EQUITY LOAN:
If you are a homeowner, another financing option might be to obtain a Home Equity Loan or a Home Equity Line of Credit (HELOC). You would need to conduct some independent research to determine how much equity, if any, you have in your home and what is involved in the application process – you can pay for a formal appraisal or speak with a realtor to get a quick idea if your home has equity. Although this may not be the most ideal option for every homeowner, it is certainly a viable solution to consider in times of need and could potentially result in lower interest rates and lower monthly payments compared to a personal loan. Please note that depending on the type of legal matter you are facing, dipping into your home’s equity may not be an option – for example, spouses going through a divorce may be prevented from obtaining financing from a source that is considered community property until the divorce is finalized (Pssst! this would be a good question to ask during your initial consultation). Click here to study up on HELOC and see if it sounds like a good fit for you.
Instead of asking one friend or one family member to fund the entirety of your representation, ask a lot of them to help out a little. Online fundraising has become a very popular choice among people needing to make almost any large purchase. It is Ideal for people who actively use social networking sites, as they will have a wider base of people to ask for help. These sites, like Go Fund Me and Kickstarter, were not originally designed to help pay for legal fees, but the concept is perfectly applicable. The downside? It can make a private, personal matter very public and it can take a while to raise the desired amount of money, so if you need an attorney tomorrow, this may not be the option for you. Check out this comparison of the Top 5 Online Fundraising Sites.
So, has money kept you back from obtaining excellent legal representation that you need and deserve? We hope this primer has helped you in considering funds are available to help you obtain the representation that you require.
At our family of law firms, we know and understand that legal representation is important. It is our mission to help people obtain the services they need, and we are dedicated to client empowerment. Our hourly rates are low, and utilization is based on your goals and the requirements of the case. At the same time, our retainers are low and provide a pay as you go option. Our 15-day statement policies and innovative client concierge programs are complimentary.
Give us a call at 505-989-8117 for a no obligation consultation. We would appreciate an opportunity to serve your legal needs.
Director of Client Relations
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