How To Fund The Costs Of Your Divorce

There are a number of options which are available for funding the cost of a divorce and some examples are listed below. Whilst we are not able to advise you as to which option you should choose, we hope, that by setting out some of the options for you it will provide some reassurance.

You can consider:

1. Your Own Resources

Savings

If you have access to savings you have built up this can be a simple and quick way of accessing funds.

Your income

If your income exceeds your outgoings then you may be able to use the surplus to pay your legal fees.

Disposing of some of your assets

If you are thinking of selling any assets in your name or remortgaging, this will need to be considered very carefully as it may be seen by your spouse and / or a subsequent court as an attempt to put assets beyond your spouse’s reach. Please call us if you are considering doing this.

From a friend of family member

If they were to be in a position to assist you, though this would be viewed by the court as a “soft loan”, more like a gift than a real hard debt.

2. From a Third Party

Credit card

Nil or low rates of interest may be available on a short term basis. Though this would have to be considered carefully as they can revert to high rates of interest very quickly.

An overdraft with your bank

This can be recalled by the bank at any time and the terms and conditions should be considered carefully.

A Personal Loan

You will need to consider carefully whether you have the surplus income to fund the monthly repayments.

3. From Your Spouse

By way of an agreement with your spouse for him / her to pay your legal costs though you will remain responsible for payment of your costs until any sums are actually received from your spouse.

Alternatively if an agreement cannot be reached with your spouse then, in some circumstances, you could make an application to the court for an Interim Maintenance Order to include an element for legal costs. This is an Order that your spouse should make payments to meet your needs including your legal costs until the conclusion of the divorce. This will depend upon your and your spouse’s reasonable income and outgoings

4. Insurance

Before the event

You should not overlook the possibility that the cost of bringing or defending legal proceedings might be covered by one or more of your existing insurance policies. Legal expenses insurance is often sold as an optional extra, or you may have taken out insurance against specific risks which would cover the circumstances of this case. If you have any doubt about this, you should review your insurance cover and / or contact your insurance broker.
 

After the event

Insurance can also be taken out after a dispute has arisen in relation to certain disputes. These tend to be ‘civil’ type claims rather than claims in connection with family breakdown, but please ask whether insurance may be available in relation to your case if you wish to consider it as an option. We should be able to provide you with some information about insurance products, but we will not be in a position to advise you as to their respective merits. You should speak to an insurance broker therefore about this.

5. Litigation Loans

If none of the above options are available to you you may wish to explore the possibility of a litigation loan to help you fund your costs pending the outcome of your case.

The lender will assess your prospects of success and the likely outcome of your case. If the lender is satisfied that you meet their criteria, then they will release money direct to your solicitors.

Any settlements must first be used to pay off the loan before any funds can be released to you.

Strict requirements are placed on potential borrowers including the requirements in some circumstances of security being given say by a charge being registered against property.

6. Public Funding

It may be that you are eligible for public funding and if you think this may be a possibility for you, you can use this link to the legal aid calculator.

Whatever option you wish to take you should obtain further information and we will be happy to discuss the position with you. Please call us on 01392 421777.