Saturday 14 April 2018

Divorce Financing Should Be The Very Last Resort

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.

Contested divorces are often spectacularly expensive because the couple simply cannot come to agreement on important issues. In such cases expert witnesses, which are very expensive, may be needed. The case can take up a lot of tie in the court and each day in court result in very steep legal costs. The best route is to agree to an uncontested divorce. Only one lawyer needs to be paid and he will not spend a lot of time on the case.

Couples that find that they simply do not have the money to pay for their divorces may have to consider a special loan designed for such circumstances. Their are many companies that provide such loans quickly. The drawback is that these loans are expensive and they have very strict conditions and terms. Such a loan can easily dump the divorcing couple into crippling 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.

Many newly married couples purchase special insurance policies that specifically make provision for the cost of legal services in the future. To many this may sound like callous planning for a certain future divorce. This is not necessarily the case, because such policies can also be important if the couple encounter other types of legal problems. It may be a good idea to approach a financial advisor in this regard.

Divorcing couples do not always think or act rationally. The fact remains, however, that they need to do everything possible to restrict the cost of divorcing. This can only be achieved with a reasonable attitude and a willingness to finalize the process with the minimum of fuss.




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