Wednesday 13 June 2018

Why It Is Best To Avoid Divorce Financing

By Susan Ward


It is a sad fact that marriages simply do not last any longer. There are many reasons for this, but the pressures of modern life and the changes in the attitudes of society about divorces certainly contribute to this phenomenon. Some things have not changed, however. Divorcing is still an emotional experience and the process can be extremely expensive, especially if the separation is acrimonious. In such cases couples are sometimes forced to find divorce financing to pay all the costs involved.

In the majority of cases both partners will end up much poorer after divorcing. In many cases they have to sell their assets such as their homes and even cars in unfavorable market conditions. Liquidating pension funds, savings and investments can also require high administrative fees and penalties. Then there is the cost of the lawyers, which can be exorbitant. The cost rises even higher in contested cases.

If divorcing couples are reasonable, fair and willing to negotiate in good faith, they can do much to lower the cost of the process. If they can, for example, reach agreement on the division of their assets, custody matters and maintenance issues then they do not need lawyers to negotiate with other lawyers on these matters. Every minute that a lawyer spend on a case is charged. In an uncontested case only one lawyer is necessary.

It is mostly hotly contested divorces that become prohibitively expensive. If the partners are spiteful, angry or vindictive the negotiating between the lawyers may take a long time, resulting in very high fees. These fees rise dramatically the moment the lawyers set foot in court. There is also the added disadvantage of contested divorces being open to public scrutiny and neither of the partners are entitled to any privacy.

Couples that cannot afford to pay for their divorces often approach financiers that specialize in financing the cost of divorces. This is an expensive route, however. There are high service fees to be paid and the interest charged by the financier will be much higher than that charged by the banks. Such loans have often left both partners in serious financial trouble.

Experts advise that a better solution would be to liquidate or sell some assets in order to pay for divorces. Borrowing money from a fixed deposit or a pension fund will not be as expensive as loans obtained from instant financiers. It is better to lose a luxury asset such as a holiday home or a boat than to pay exorbitant rates to pay back a loan.

Many couples enter into prenuptial agreements before they get married. Such agreements can also help to lessen the cost of divorces because most of the main areas that are normally contested will already be decided contractually. It is also possible to purchase special insurance that is designed to cover the legal cost of both partners during their marriage. This often include the cost of divorcing.

Divorces can be financially crippling, but this is not always necessary. All it takes is for both partners to be reasonable and to do everything they can to separate amicably. Unfortunately, not all couples are reasonable and they will have no choice but to pay for the very high price of a contested divorce.




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