How do you pay for a lawyer when you have no money?

Unsecured personal loans for legal expenses are one option. Credit cards are another. Many attorneys will not take a case until the client funds a large upfront retainer fee.

Other legal counselors will agree to work on a contingency basis and defer charges until after they win your case. However, this occurs primarily with certain types of lawsuits.

Sometimes the judge will assign a court-appointed attorney for criminal cases. However, only indigent people qualify for this “free representation.”

Options to Pay Your Lawyer When you Do Not Have the Money

Every option the helps you pay your lawyer when you have no money comes at an added cost. Having good legal representation can be priceless – especially when you have a successful day in court.

However, there is no free lunch.

Request a personal loan to fund your legal expenses. A network of online lenders will view your qualifications and may present offers, which you can accept or decline. Compare the amount and terms offered to credit cards, contingency fees, or finding a practice the offers monthly installments.

Monthly Installments

It is often difficult to hire a good lawyer using monthly installments after they provide services. Most competent in-demand counselors charge for services upfront by requesting retainer fees. In addition, they focus on their specialty – not underwriting, billing, collections, etc.

Bad credit personal loans with monthly installments are hard to find through specialty online lenders. Therefore, do not expect a law practice to provide legal services (lend money) in advance of payment – unless they are desperate for business. It defies industry best practices and may be a sign of poor future representation.

Some good attorneys will charge for legal services after-the-fact for small projects like writing a single letter, drafting a simple will, fixing your credit, or negotiating a debt settlement. They sometimes agree to spread upfront retainer payments for large projects over several months – and then spend down the retainer based on the hourly billing rate.

Credit Cards

It may make sense to pay your lawyer using a credit card if the office charges upfront retainer fees. Many professionals will not begin working a case until the client funds the requested retainer. This upfront charge eliminates future collections problems.

Keep in mind several key considerations.

  1. The attorney must agree to accept credit card payment. The banks charge merchants a processing fee, which can range up to 3% of the transaction. Therefore, make sure to ask first.
  2. The client must have sufficient “open to buy” on the credit card. Open to buy is the difference between the account limit and the outstanding balance. The bank will decline any transaction that exceeds this amount.
  3. The projected total cost of the legal case should be less the open to buy on all your accounts. Cases drag on. Charges pile up. Clients can easily run out of credit card charging power before a case concludes. Plan carefully.
  4. Credit card balances balloon quickly when clients do pay the balance in full at the end of the billing period. The interest rates are often very high on revolving accounts.

After Case/On Contingency

Paying your attorney after the case ends or on a contingency basis is an option for plaintiff clients pursuing lawsuits. Contingency means that the lawyer takes a portion of the settlement if he or she wins the case. The plaintiff may pay nothing if he or she loses.

Keep in mind that lawyers offer contingency arrangements when they have a winnable case, with a sufficient award, and a deep-pocketed defendant. They also demand a bigger slice of the pie in exchange for taking on the additional risk and waiting for their compensation.

  1. Any facts should suggest that a judge would rule in your favor
  2. The settlement amount must be large enough to split with your counselor
  3. The defendants should have the resources and insurance to fund the settlement

Here are examples when a lawyer may accept contingency payment after winning the case.

  1. Disability cases have a defendant (the Federal Government) with deep pockets
  2. Personal injury cases frequently target the insurance companies backing the defendant
  3. Worker’s Compensation cases also have an insurance company behind the claim
  4. Workplace age and sex discrimination cases target large employers

Real estate lawyers frequently accept payment after a mortgage closing. The legal fees are part of the closing costs, which many homebuyers choose to roll into the mortgage balance. The lender is the deep-pocketed party in this scenario.

Unsecured Loans for Family Law Legal Fees

Unsecured personal loans for family law expenses do not put your home at risk. With unsecured financing, you do not pledge collateral (house, car, 401K account or other assets) that the bank can later repossess in the event of default.

Family law issues often put couples at financial risk as extra costs and lost income frequently combine following each case. Since the legal fees for adoption, divorce, and child custody often run very high, financing without collateral is safer for the borrower.

Child Adoption

Taking out a personal loan for child adoption legal fees can address only a portion of your family’s financial shortfall. The average cost to adopt a child in the United States exceeds the amount most lenders will approve – even for the best-qualified couples.

Consider these average cost figures totaling almost $40,000.

  • Adoption agency expenses: $17,000
  • Legal fees: $13,000
  • Birth mother expenses: $5,600
  • Advertising & networking: $4,000

Adoptive parents may be able to borrow up to $35,000 of these expenses if they have a pristine credit history and sufficient income to make the monthly payments.

These resources can help raise the money or reduce costs.

  • Foster care adoptions are less expensive
  • Christian organizations offer interest-free adoption loan programs
  • The adoption tax credit reduces first-year expenses
  • Non-profits offer adoption grants after completing home study programs

Separation & Divorce

Taking out an online personal loan is one way to pay for a divorce lawyer with no money. However, this often proves very tricky. Finances usually deteriorate when a family breaks apart making on-time repayment difficult after the dust settles. Staying together and working through the marital issues is often much better.

  • Expenses rise
    • The couple lives in two homes instead of one
    • Divorce attorney expenses pile up quickly
  • Income drops
    • Change in childcare responsibilities
    • Emotional stress hampers work productivity

If possible, each spouse should borrow in his or her own name based on individual income rather than household earnings. This keeps the obligation separate and avoids complicating an already messy situation.

Non-working spouses (usually the woman) often find it difficult to borrow without an income source. She may need to qualify based on the expected divorce settlement. In this scenario, use the projected alimony and child support payments to find an affordable monthly payment amount.

Child Custody

Taking out personal loans to finance child custody cases is even more heartbreaking. Custody issues arise with unwed parents, and during the divorce process and after the settlement.

Emotions run high when two parents fight in court over visitation rights. It is far better to settle the issues amicably than to run up legal fees fighting over a child. However, human nature makes this rare.

Single parent loan qualifications are usually poor on the two most important criteria.

  1. Single incomes are often lowest for the custodial parent who has less time for work
  2. Low credit scores are common as many solo parents live in poverty

Exhaust all avenues for child custody legal aid before borrowing money. Victims of domestic violence often find local agencies willing to help.

Financial Assistance with Criminal Defense Attorney Fees

Taking out a personal loan to pay criminal defense attorney fees should be a last resort. It makes sense when you need to hire a top lawyer to keep you out of jail or allow you to keep your license after driving under the influence (DUI).

Most state, county, and local governments provide financial assistance. You may have heard the Miranda warning while watching a police drama on the television, “if you can’t afford a lawyer one will be appointed to you.”

Public Defender

Court-appointed criminal defense attorneys and public defenders work at the expense of the local government. However, not every person accused of a crime qualifies for these “free representatives.”

  • You must ask the judge for court-appointed counsel at the arraignment
  • You must show indigency which is based on income and the severity of the crime

Court-appointed attorneys and public defenders are often over-worked and carry large caseloads. They may not have the time to provide the most thorough defense. However, they often have far more experience than their private counterparts do.

Private Attorney

Defendants who earn too much money for indigency or want dedicated representation often need a personal loan to hire a private criminal defense lawyer. However, it is often very difficult to meet lender qualifications without a cosigner for multiple reasons.

  • Bail bonds can affect your consumer report if referred to collections
  • Misdemeanor charges can lead to incarceration for months at a time
  • Felony convictions often result in years of jail time before parole
  • Previous convictions make it difficult to land a high-paying job

It is very difficult to repay the lender while in jail – a possibility in many criminal prosecutions. Therefore, expect to borrow money using the cosigner’s credentials. The cosigner should be willing and able to foot the entire bill – because that often happens.

Posted 03/22/18 4:26 PM by Kevin Haney MBA