The financial crisis of 2008, still euphemistically referred to as the ‘Credit Crunch', has caused untold and lasting damage to the world economy and has now impacted on divorce.
Divorce is expensive, very expensive and in the past ‘divorce loans' were available to help meet those costs of divorce. These loans were very often taken out by women who statistically are likely to be the lower earners in most marriages.
A tribute to our brave bankers
Many banks have stopped offering these short-term divorce loans whilst others are using unrealistic lending criteria to turn away even potentially wealthy clients. Those that do satisfy these criteria are being charged massive interest rates. Now that's what we call responsible, customer friendly banking!
Our lovely banks who are so deeply implicated in the current economic crisis are never slow to find yet more ways to rip off vulnerable (but perfectly credit worthy) customers.
In the past banks were very keen on these loans as they were usually secured on a large and appreciating property asset - the marital home. High interest rates also made them very profitable. These days financial institutions will only advance the cost of a divorce if it can be repaid immediately and in cash once the settlement is finalised.
Divorce is very expensive
The more complex the divorce the more it will cost. It's that simple (or not!). Unscrambling shared assets such as property and investments can be tricky and hence expensive, with costs running into the thousands of pounds. Lawyers charge by the hour and the longer it takes the more it costs.
Rates will range from £120 to £400 per hour and well beyond. There can be marked differences between practices in the same area as well as between hotshot big city firms and small town practices. So a lawyer who works slowly will cost more than one who works quickly. However, remember a more expensive lawyer working quickly can sometimes be cheaper than a less expensive one working slowly.
Total costs can vary widely
A simple, amicable divorce in which only paperwork is needed might cost around £1,200. Any complications or disagreements will make the fees increase dramatically. Mediation is a good option. Here lawyers work with a couple to make an agreement outside of court, whilst it's a great idea it's not a cheap option. Typical costs are between £5,000 and £6,000.
If you go for the Full Monty of a contested divorce where it goes to trial this will often cost upwards of £20,000. If it turns out to have all the fury and fruitlessness of the Battle of the Somme in 1916 it could move towards £100,000 rather easily. Unfortunately, Legal Aid is a rare and dwindling option. If it is available it often does not cover the full cost of the divorce.
What's to be done
The rising cost of divorce and the increasing difficulty in raising funds have had a disproportionate effect upon some women seeking divorce. This has led to a significant rise in the popularity of online 'quickie' divorce services. There is no doubt that these services can be appropriate for some ‘it's all agreed now let's do the paperwork' divorces.
However, it should be understood that these cut-price DIY options can leave couples open to costly and emotionally catastrophic errors as they just carry out a function and offer very little, if any advice.
The only surefire way to reduce the cost of your divorce
There is only one absolutely guaranteed way to do this and that is to sit down with your partner and decide between you the exact details of your split down to the last teaspoon and who gets to keep the cat.
It is very rare that two people who no longer wish to live together can have this discussion. The relationship has usually broken down to the extent that more than 30 seconds civil conversation is beyond them, let alone a deeply emotional conversation about how to break up what had been a loving relationship and is now a casualty strewn battlefield.
If you can't do that do what you can and then get a good lawyer. Tell the lawyer what you have agreed and let them get on with it. Remember they charge by the hour so if you have to call them make it quick and focused. Chatting or complaining about your partner's latest transgression is a waste of time and very expensive. Good luck.