Cost of Divorce And How To Pay For It10th Dec 2020
Getting Divorced And Dividing Up Assets
Divorce (the legal ending of a marriage) and the division of assets are two separate legal processes. With two separate sets of costs (if you are instructing solicitors).
It’s important to understand that right from the outset. And to appreciate the difference – along with what it will mean for you and your family.
Cost Of Divorce In The UK
Here are the costs you can expect to pay during the two stages of the divorce process:
1. Fixed Fee Divorce
This is the less expensive part of the process. Coles Miller’s divorce solicitors offer a fixed-fee package for the person starting the divorce (the Petitioner) of £750+VAT, plus court fees of £550. We will deal with the whole process, provided that it proceeds without:
- a defence from the respondent (the person receiving the divorce papers) – but defended divorces are rare
- issues about the service of papers
- any argument about divorce costs.
If you are a respondent to the divorce, the fixed fee is £400+VAT. This includes completing the acknowledgement of service then passing on the rest of the papers from the court with advice.
None of these fixed-fee costs covers any work relating to financial and children matters. These are charged separately.
2. Dividing Up Your Assets
Ending a relationship means dividing up your assets. This need not be the financial meltdown that some people fear. Instead, it can be a very liberating experience: the chance to start again.
But it’s important that you approach the process with a view to reaching an agreement as smoothly and as quickly (but not hastily) as possible. The longer it takes, the more it costs and the less there will be to divide up at the end. Protracted bickering benefits no-one.
How much it costs can vary significantly depending on the assets involved, the complexities of your finances, whether or not you go to court, how quickly you can reach an agreement and whether children are involved.
Here are your three main options:
- Option 1 (cheaper, smarter, faster, easier) – you and your former partner agree to go through mediation. You keep the case out of court. You sit down with an impartial mediator who helps you to reach a fair and sensible agreement. You stay in control. Neither of you has to do anything you don’t want. This form of alternative dispute resolution has a strong track record of success.
- Option 2 – Solicitor-led negotiations; you and your partner both instruct solicitors to engage in financial disclosure and then enter into negotiations. This traditional approach is still very effective and gives you the benefit of legal advice when you require it. This option quite commonly moves alongside the mediation.
- Option 3 (more expensive, time-consuming, stressful) – you and your former partner go to court and argue. You could lose control of the process. You are collectively handing the final decision to a judge. You are both forced to abide by his/her decision (which neither of you may like).
Mediation is the preferred option for many people. There are other forms of alternative dispute resolution that will keep your case out of court. They include arbitration but it’s not like mediation. Arbitration means handing the decision to a third-party arbitrator; you must abide by their decision, whether you like it or not.
Whichever route you choose, it’s important to try and secure a full and final settlement otherwise you could face continuing financial claims in life and death.
You don’t want your former partner to come back and claim against your assets, such as your pension fund. Nor do you want them to claim maintenance payments if your financial position improves (if you suddenly win the lottery or gain an inheritance).
How To Fund Your Case
Each side pays their own costs in most financial cases. But here’s the reality: generally you can’t get Legal Aid for divorce or dissolution of a civil partnership or for sorting out children and finances. Some exceptions still apply (including where there has been domestic/financial abuse, violence or child abduction).
Funding the cost of divorce can be a worry for many people. They may not have significant savings. Or if they do, their money may be tied up in investments (that carry penalties for early withdrawal) or property. They may be ‘house rich but cash poor’.
Here are some of your options:
- A Sears Tooth Agreement assigns the client’s settlement to the solicitor so they can cover their costs once the case is complete. Most solicitors won’t accept a Sears Tooth Agreement because they are too risky; they may not get paid.
- Borrowing from friends/family – this can be fraught with difficulties because it can spark rows over money later on.
- Selling some of your assets – but this may be an issue if you’ve already started the divorce process. You may have to divide the money you make from the sale with your former partner.
- Using a credit card.
- A loan (these can include litigation loans taken out through a third party). Litigation loans are tailored to fund legal fees and disbursements in family law cases. They can be taken out at any time during the proceedings and are flexible; money can be drawn down whenever you need to pay any outstanding invoices. The loan is usually secured on the likely outcome of the financial settlement – not on your income. These loans are not automatically available and are assessed by a third party lender before being offered.
Coles Miller is not authorised to take out loans on your behalf nor to give any financial advice in relation to them. We can, however, provide information regarding the availability of litigation loans.
Get Expert Legal Advice
Find out more about the cost of divorce and how to finance it. Book a free chat with a family lawyer.