Divorce Day – What you need to know

Whether you believe in ‘Divorce Day’ or not, many Family Law firms report a spike in divorce proceedings on the first working Monday after the winter break.  

That said, although separation applications are traditionally expected to rise in the new year, recent statistics released by The Marriage Foundation reveal that current divorce rates in England and Wales are falling fast, with the divorce rate in the first 15 years of marriage dropping to 22.5 per cent for those who tied the knot in 2017. Compared to a rate of 31 per cent for the same group in 1992, the impact of Divorce Day may be fading as the number of divorces drops.

Sir Paul Coleridge, the former senior family court judge leading the report, suggested that these findings reflect the more positive societal attitudes being taken towards marriage and divorce, outlining how the next generation are undertaking marriage with “a degree of serious commitment not seen for decades”. Regardless of rates dropping, however, a key issue remains unaddressed that affects both those exploring divorce and family law professionals: the difficulty of funding a divorce.

Those making the already difficult decision to divorce often face the added pressure of juggling the financial costs of proceedings alongside the emotional costs. What’s more, the number of financial choices available can often prove daunting. As such, there are several financial and legal courses of action couples should consider when entering into a complex, high-risk divorce.

First steps:

Many couples may be tempted to use the new year as the catalyst for a fresh start, but it is important not to rush into separation proceedings without talking to someone who is familiar with the divorce process. By seeking reputable, practical support from a lawyer or trusted financial adviser, couples can receive informed and objective advice from a qualified professional before entering into what can often turn out to be a complicated, emotional process. 

Couples who have been married for many years can also run into difficulty when dividing their accumulated assets, finances and property, causing their divorce proceedings to become unnecessarily lengthy and financially taxing. In these instances, organisation and communication are key. By discussing the issues that need to be resolved by the family courts in advance, couples can save valuable time in court, subsequently cutting down their legal fees.

Legal Funding Options:

Divorce can be a squeeze on the finances of everyone involved, so it is important to be aware of the different financing options available before entering court proceedings.

One option to consider is taking out a 0% interest credit card or personal loan, which can allow couples to avoid paying interest for up to 12 months. However, with many solicitors not accepting this kind of payment, and divorces often taking longer than a year to finalise, this simple option does not always cover the necessary ground.

Some solicitors offer ‘Sears Tooth Agreements’, a legal contract that extracts any owed fees from the divorce settlement. Though these can provide an efficient solution in the case of a successful settlement, only a small number of firms are willing to take the high risks involved in STA contracts, making this a hard-to-find option.

Another route is to seek a Legal Service Payment Order, which allows the court to order one ex-partner to fund the entirety of the legal costs. These can be useful when one partner has control over the household finances and income, however LSPOs are only available if a litigation loan cannot be signed or Sear’s Tooth Agreement entered into.

With so many legal funding options out there, it can be difficult to determine which will provide the safest and easiest route to a successful divorce. Unlike most legal funding options, Ampla Finance Legal offers responsible and responsive loans based on the assessment of the estimated legal costs. By only charging interest on the amounts used, we allow our clients to stay in control of their finances without compromising their monetary security.

If you would like to learn more about our Fair Finance, please read our FAQs here. For more information on all your divorce funding options, visit the Money Advice Service.  

Know your divorce funding options

We appreciate that divorce is already a difficult time, without the added pressure of juggling legal costs too. Since legal aid cuts in 2013, an increasing number of people have had to weigh up their divorce funding options. From credit cards to personal loans, the financial choices can be intimidating and expensive.

Many people choose to borrow from family and friends, but did you know that this can risk your divorce settlement in court if you don’t sign a formal agreement? Courts may not always take into account this type of ‘soft’ loan when making the final divorce settlement. It sounds obvious, but if you do borrow from friends and family then do ensure you have clarity as to how and when you will pay them back – it can harm relationships if there is ambiguity or confusion when it comes to finances.
Another option is to seek a Legal Service Payment Order, by which a court can order your ex-partner to fund your legal costs. Alternatively, an out-of-court agreement with your ex may be made if they are willing to cover your fees.

Settling costs with your former partner not possible? It’s easy to understand why you might want to avoid further court proceedings. In that case, you could consider taking out a 0% interest credit card or personal loan, as long as you qualify with a high enough credit rating. However, the bar is often set so high that this can prove to be a tall order.

When it comes to taking out loans, high street banks don’t tend to be competitive, so this does involve a lot of shopping around and can result in paying a lot in interest. Opting for a 0% interest credit card instead allows you to avoid paying interest for a limited period of time – usually under 12 months or less. If you do take out a credit card it’s worth checking when the 0% deal runs out, as many divorces can take longer than 12 months to finalise. It’s also important to find out whether your solicitor even accepts this kind of payment, as many don’t.

Some law firms do offer a legal contract which extracts fees directly from your divorce settlement. This known as a ‘Sears Tooth Agreement’, and is usually only suitable if your solicitor is confident of a successful settlement. Few firms are willing to take the risk, making this a tricky option to rely on.
With all this jargon flying, and risks high, we decided that there should be a simpler and safer way.

We launched Ampla Finance Legal to streamline these complicated options into a simple, bespoke solution. We work in partnership with your solicitor to design a loan best suited to your financial needs. Since we offer responsible loans based on an assessment of your likely legal costs, there is no need to sacrifice your financial security. We recognise the need for a quick decision and tailored divorce loan which cuts through legal jargon. That’s why we promise fast, flexible, and above all, fair financing.

If you would like to learn more please read our FAQs here and for more information on all your divorce funding options, the following are also useful guides:

The Money Advice Service
Citizen’s Advice Service
FT Adviser