Why So Many Couples Need Divorce Financing

By Sandra Hamilton


Divorces are no longer seen as disgraceful. They are, in fact, rather common and single parent households have become commonplace. Divorcing is hardly ever a civilized, sterile affair. It involves a lot of stress and many divorcing couples find the process extremely painful. Unfortunately, divorces can cost a lot of money and many couples simply do not have liquid funds sufficient to cover this cost. In such cases, they may have to look at alternative sources of finance, such as divorce financing.

Divorces almost always result in both partners being financially less well of than they were before. Assets and shares often have to be sold in less than ideal market conditions. The liquidation of some investments and shares may result in a hefty administrative fee or even severe penalties. The cost of hiring a lawyer to handle the process can also be very high. Many couples therefore find that they cannot afford divorcing.

There is some good news, however. Much can be done to restrict the expense of the process. If couples are reasonable and agree on most issues between themselves they will not spend as much time with the lawyers. This can result in significant savings. Hiring one lawyer instead of one for each partner can also cut the fees in half but then both partners must make an effort to accommodate each other.

The most expensive divorces are the ones that are contested. By agreeing on an uncontested divorce couples can lower the cost of the process significantly. They do not even have to use the services of an expensive lawyer. It is legal to rather use a specially qualified and licensed counsellor to draw up the final agreement and to present it to the court for approval.

If there do not seem to be any alternatives, divorcing couples can apply for a special loan. Many institutions specialize in loans meant for paying the cost of divorcing. These loans are expensive, however, and it is not uncommon to pay a commission of up to fifteen percent of the loan amount. Such loans should be seen as a last resort because they can easily plunge both partners in serious long term debt.

One alternative to borrowing cash to pay for divorces is to rather consider selling an asset or liquidating some investments. This may deplete the value of the estate, but in the long run it will almost certainly be cheaper than borrowing. In some cases it is even possible to borrow at much better rates against pension funds and fixed long term investments. These options should be discussed with a financial advisor.

Nobody wants to plan ahead for divorces but divorces are not the only legal issues that will face couples throughout their marriage. It is therefore a good idea to purchase an insurance policy that specifically caters for the cost of legal representation when needed. Such policies are affordable, especially if they are purchased at an early age.

The facts about the cost of divorces are really quite simple. The more acrimonious the separation is, the more expensive the process will be. Spite, anger and hatred will inevitable translate into massive bills. It is really best to be reasonable.




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