No one plans for the cost of divorce. Nobody stashes aside money specifically to cater for divorce. So if you’re struggling to get money to pay for your divorce, know that it is completely normal and acceptable. In this article, we’ve compiled creative and actionable ways you can use to fund for your divorce.
Divorce is an investment in your future. So no matter the reservations you might have about the cost it brings, know that it will all be worth it in the end. It is an opportunity to open a brand new chapter – one built on the foundation of independence and self-sufficiency.
Below are a few options to get started planning to pay for your divorce.
If you and your soon-to-be ex have joint accounts, you may withdraw at least half of the funds in them to pay for your divorce. Do this before you file for divorce. Once one spouse files for divorce, withdrawals from joint accounts are generally restricted unless you and your spouse agree on an advance disbursement of funds. If you would like a larger share of the money in a joint account, consult with a divorce attorney first so you know if and how that action will affect your proceedings.
Get Spouse to Pay
It’s normal for one spouse to earn a considerably higher income than the other spouse. If you are the low-earning spouse, or you have been staying at home taking care of the children, consider having your partner pay for a portion of your legal fees. If they are reluctant to do it, a court may order them to honor your request.
Keep in mind, though, that the court will not order your spouse to pay the whole amount. Your need and the other party’s ability to offset your legal fees will serve as the basis for a judge’s decision.
Borrow from Family or Friends
This might look like an unpleasant option at first glance, but it is actually how most cash-strapped spouses pay for their divorce. We have seen clients borrow money from a new significant other, a parent, coworkers, and friends. There are also instances where a boss has loaned money to our client.
Finance Divorce with a Second Job, Hobby, or Project
The idea is to come up with some extra cash while keeping yourself busy during this difficult and stressful time. Chances are, there are job openings out there for the exact hobby or passion you thrive in, whether that be social media marketing, gardening, or something as technical as fixing broken computers. If anything, this is a far much better alternative than taking out a loan, especially if you have time to spare.
Take Out a Loan to Pay for Your Divorce
Desperate times call for desperate measures, so if taking out a loan from your bank or credit union is the only available way to cover for your divorce expenses, go for it. Be sure to apply for a loan that covers your entire costs so you are not left stranded halfway. If your credit score is solid, and you are in good standing with the financial institution, you might get a low interest rate.
If this option is good for you, we can introduce options from 3rd lenders for you to consider.
Pay for Your Divorce by Selling Your Property
An enticing an option as this might look, it comes with its fair share of hurdles. If you are selling property, make sure it is something you acquired before you said “I do”. In the context of the law, this is considered “separate property” and therefore not prohibited to sell. If you and your ex-spouse acquired property over the course of your marriage, do not sell it under any circumstances as it is considered “community property” and therefore co-owned.
It is also worth keeping in mind that you cannot sell property after divorce papers have been filed. If you insist on selling it, you may receive a court order prohibiting you to do so.
Another excellent way to offset divorce costs is to utilize your rainy day fund. Even if you did not purpose to use it in this way, it might still save the day when you need it the most. Sadly, most people never set aside savings, let alone funds for a resource-intensive event like divorce.
You might not be planning to divorce your partner any time soon, but it does not hurt to set up a rainy day fund in case you ever need to use it. We believe it is better to be prepared and not use such savings than the alternative.
If you have a good credit score and credit limit, consider paying for your divorce using a credit card you open in your name only. You may need to open separate a bank account for this. Using a credit card from an account that you share with your ex-spouse may have a negative outcome on your divorce case.
Look into Your Retirement Account(s) to Pay for Divorce
You can also utilize funds from your 401(k) account, or any other retirement account, to pay for your divorce. However, not all retirement accounts or 401(k) plans allow you to borrow. If your employer will not permit it, you will not have this option available. Check with your financial advisor first to see if you are allowed to borrow and what the maximum limits are.
Even if your request is granted, you may still need your spouse’s approval to take out money out of your retirement account. Speak with your partner first and explain your reasons for wanting to explore that option. Make it clear that the money will be accounted for it court. The idea is to have your spouse think that they will get some, if not all, of the money back at a later date.
Do You Have Additional Questions Regarding Divorce? We are Happy to Answer Them All.
Beyond the obvious financial concerns surrounding this process, we understand that you might have other questions regarding divorce as a whole. We invite you to speak to one of our award-winning divorce attorneys today, so you can get the clarity and confidence you need to start the next the chapter of your life. Schedule a consultation today at (215) 523-6900.