How Will I Pay for my Divorce?
Paying for your divorce
Finding the money to fund the costs of a divorce is a worry for many people. There are a number of methods people use to fund their divorce or separation. We have listed some examples below. This is by no means an exhaustive list but we hope it will give you some reassurance. For professional help on paying for your divorce please contact us on 0800 840 4929.
You can consider:
Selling assets or re-mortgaging
Apply for a litigation loan
If your income and/or savings are not enough to meet the costs of your divorce or separation another funding option is a litigation loan. A litigation loan is a loan where a lender assesses the prospects of your case and the likely level of your settlement and then, if satisfied that their criteria has been met, releases money direct to your solicitors to discharge legal bills as and when they arise. Eventually, when you receive your financial settlement, the money can then be used to pay off the loan. However, lenders do impose quite strict requirements on potential borrowers and often require assurance that the final settlement will be over a set threshold figure. If this is a funding option that you are considering we would be happy to discuss this with you in more detail. Please contact us on 0800 840 4929.
Apply for a maintenance payment pending divorce suit
If you are in urgent need of money before a financial settlement has been reached you could apply to the court for an order that your spouse or civil partner make regular maintenance payments to meet your needs until the divorce is concluded or the civil partnership dissolved. This is known as maintenance pending suit and the amount that you are awarded can include an element for legal fees.
It is not unusual for family members or friends to help with legal costs during this difficult time. However, if you do receive money in this way you must be aware that the court is likely to view it as a 'soft loan', i.e. something more akin to a gift than a real loan. When assessing what your assets and liabilities are, the court tends to presume that money lent by friends or family will either not need to be repaid immediately or not at all. This could leave you in a difficult position if you have promised someone that you would repay them but don't have the funds to do so. We would recommend that any money received from family or friends is recorded in a formal loan agreement and that you state a date for repayment together with an agreed rate of interest. This may not be enough to satisfy the court that it is not a 'soft loan' but may help.
Apply for a credit card / overdraft
If you know that you will receive some money when the assets have been divided, whether that be from the sale of the former matrimonial home or a lump sum from your spouse or civil partner, you may consider incurring some temporary liabilities with a view to repaying them when you receive your settlement. Nil rates on credit cards can sometimes help in the short term, but care must be taken as they often revert to a high rate of interest after a short period.
Apply for a personal loan
You may choose to loan money from a commercial third party as a short term measure to cover the costs of your divorce.
Consider selling assets or re-mortgaging
If you own assets in your sole name you may consider selling some or all of these to meet your ongoing costs. HOWEVER, if this is an option for you we would strongly advise that you speak to us before doing so. Any sale or remortgage of an asset by a person going through a divorce or separation may be viewed by the court as an attempt to prevent your spouse from having a share of that asset and you could be penalised as a result. Call us on 0800 840 4929.
Income
If you are fortunate enough to have income which exceeds your outgoings this is good method of funding as it is usually the most accessible financial resource.
Savings
Again, if you have built up savings these funds can usually be accessed relatively easily.
For more information about divorce costs
We understand cost is a common worry for separating spouses. Please see our how much will my divorce cost page. This page contains information on minimising costs and our compliance with Resolution to avoid aggressive costs. If you need advice on divorce please call us on 0800 840 4929.