For many people, one of the biggest concerns they have when facing divorce proceedings is how to pay for their legal costs. For some, the family finances as a whole will already be limited and any extra expenditure will exceed income; for others, they may not have control over the family finances and will therefore be worried about how to allocate joint funds towards their individual costs.
This guide is intended to give a snapshot of the options available when paying your divorce costs. I use the term “divorce costs” loosely as, in the course of divorce proceedings, you may also need advice on a financial settlement and/or on the arrangements for your children.
Funding for a divorce usually comes from one, or sometimes both, of the following:
(1) Family Resources;
(2) Credit Arrangements.
1- Family Resources
Ideally, the costs will be met from existing family resources such as your income and/or savings.
Points to consider:
A – Can you meet the costs from your own income?
You can arrange with your solicitor to be billed regularly which will help to keep invoices at a manageable level with the aim being to pay them from your income.
B – Can you meet the costs from your own personal savings?
If you have savings in your sole name then those can be put towards your legal costs.
C – Do you have any joint savings?
If so, you could try to come to an agreement with your spouse that you or, if necessary, both of you use the joint savings to pay your legal costs.
D – Is your spouse in a position to pay your legal costs as well as his/her own?
If your spouse is the main breadwinner and has a significant income then they may be able to pay your costs. It would be necessary to reach agreement with them early on as to how your costs are to be paid and to obtain payments on account before you actually incur the costs.
If it is clear that your spouse has the funds to pay your reasonable legal costs but refuses to do so then you may be advised to apply to the Court for a “Legal Services Payment Order”. The purpose of such an Order is to enable a party to obtain appropriate legal services when, without the Order, they would not be able to do so. There are, however, a number of factors which must be considered before making an application for a LSPO, including whether or not you can first obtain a loan to cover your costs.
2 – Loans/Credit Arrangements
If none of the options in (a) to (d) are available to you then it will be necessary to consider borrowing money to meet your legal costs.
NB. The option of a loan must be considered before making an application for a Legal Services Payment Order.
Any loan or credit obtained would be on the understanding that you will receive sufficient funds as part of your financial settlement to repay it.
A – Loans
Can you borrow from the bank, a family member or friend?
If you receive money from a family member or friend, you must ensure that it is clearly documented as a loan, to include the terms for repayment. You must be able to show that it is not a gift.
B – Credit Arrangements
Can you take out an interest free credit card?
Some people use this option when faced with no alternative.
Specialist credit arrangements to pay legal costs:
Some credit arrangements are available with companies who specialise in providing funding for legal costs. In basic terms, they pay your legal costs upfront, you pay interest during the proceedings and the full amount is then paid at the end of the matter from your share of the financial settlement. Terms and conditions do vary and it is essential to consider the small print carefully before committing to such an arrangement.
Exemption from Court Fees
If you are on a low income and/or in receipt of certain benefits then you are likely to be exempt from paying some, or all, of your Court fees. The exemption can mean a considerable saving in divorce proceedings when the usual Court fee is £550. I will help you to complete the relevant application form.
Free First Appointment
I never want my clients to have the added worry of how to pay their legal costs. For that reason, costs are always discussed openly and honestly at the initial meeting. I offer a free first appointment of 30 minutes to all family law clients. The purpose of that appointment is for you to explain your situation, for me to advise you on your options, including the cost of those options, and for us then to discuss how you will be able to fund your case. Any worries you have about meeting your costs will therefore be addressed at the outset before any costs have been incurred.
Due to Covid-19, I am currently doing most of my first appointments by phone. If you would like to book, please email me on brigitte.shakespeare@cognitivelaw.co.uk or text/call me on 07872 149488. To find out more information on our family law services please visit out family law page here.