How to fund divorce or family legal case
Silk Family Law’s highly successful approach to my complex divorce was to avoid acrimony and confrontation in favour of seeking an amicable negotiated solution with a strong focus on saving costs wherever possible.
Funding legal fees for a divorce can be daunting. Cashflow may be tight or there may be insufficient liquid capital to fund fees on an ongoing basis.
There are various options to help clients pay for divorce costs:
Payment on account
For some clients we can agree regular monthly payment on account of costs which is used to pay or offset invoices as they are generated. This spreads payments over the course of the divorce proceedings.
Credit and loans
Funding legal costs through credit is quite common in divorce cases. If a client uses credit to pay for divorce proceedings it is shown as a “need” and is taken into account when dividing a couple’s assets. Clients should make their own arrangements for finding a loan or credit - options include:
- A loan from family or friends. The terms of this “soft loan” should be written into a record of agreement to ensure that it is taken into account in divorce negotiations or a court case
- A commercial loan, from a regulated lender, such as a personal loan or credit card
- Specialist lenders who advance money by taking assets such as expensive motor vehicles, paintings or jewellery as security.
Silk Family Law can help clients to apply for a litigation loan from bespoke lenders and banks who are prepared to lend to clients to enable them to pay their divorce legal fees.
The lender will normally require details and value of the assets, together with the likely share of assets a client will receive in a divorce settlement. Usually the capital element of the loan and accrued interest will be deferred until the case ends and a client receives their financial settlement.
Litigation funding is not a viable option where the only disputed issue is children’s living arrangements.
Legal Services Payment Order
If a client’s ex-spouse has the means to fund their legal fees, yet refuses to do so, we can apply for a Legal Services Payment Order to force them to make a contribution. To qualify for this Order, the client must show evidence from at least two commercial lenders that he or she cannot obtain a loan to find divorce costs.
For information on how much divorce costs see Cost of divorce and applications
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