DIY divorces have become more popular since the recession, but there is a major caveat you need to be aware of. Here's how to keep the cost of divorce down.
Going the DIY route
You can keep the involvement of lawyers to a minimum by going down the DIY route with the divorce itself and coming to an agreement on your finances.
Here’s how it works: first, you follow the step-by-step guide on the Government website to get a full picture of your circumstances and finances.
You will then both receive impartial advice from an experienced family law barrister to get an idea of what a ‘fair’ division of assets would be. You can use that information to come to an agreement on how to settle your assets.
Intelligent Divorce argues that a lot of the time which solicitors will charge you for is just for them researching your finances, a step you can do on your own, saving money in the process.
While this is certainly a cheap way of getting divorced, with the co-operative service (where both partners do it together) costing £499 each, it’s clearly not going to be appropriate for everyone.
If you just want to get the divorce itself done, there's always the online option, which can cost as little as £37 and save you the faff of consulting a solicitor.
But whichever route you choose, you'll still have to pay a court fee of £550 for the divorce itself.
Make sure you've tied up all the financial loose ends before you part ways if you're going for the online option.
Many who went for a cheap divorce during the recesssion are being contacted by their ex-partners if one party comes into money through an inheritance, a lottery win or other windfall.
Victoria Walker of law firm Simpson Millar says that she has dealt with a rising number of cases where a couple with modest assets divorced without making any financial agreements, or signing a consent order.
This means that if one party increases their wealth, the other is legally entitled to it.
"With no legal expertise to hand, thousands of couples made the fatal error of assuming that all ties were cut once the divorce was finalised. That's sadly not the case and the ghosts of marriage past are now coming back to haunt them in rather costly and unpleasant dramas," she said.
There has been a sharp rise in people representing themselves in recent years, partly to save on legal fees.
A financial settlement can be made any time before or after the divorce, but if you are at all unsure about what to do you should seek legal advice.
Alternatively, you could opt for a consent order. This is a legally binding financial agreement drawn up by the solicitor and signed by you and your ex-spouse once you've both provided financial disclosure and taken legal advice. It's then reviewed and approved by a judge in a family court. A consent order costs £50.
Walker is predicting a rise in cases from past marriages as more people reach retirement age. She says that anyone getting married for a second or third time should be completely sure they've cut off financial ties from previous marriages.
Don't fancy the DIY route? Here's what you need to know about how to divorce cheaply.
‘Til irritation do us part
Unfortunately, divorces can often be complicated, messy - and expensive.
According to Intelligent Divorce, even a straightforward divorce will cost £750 plus VAT for an applicant and around £200 plus VAT for the respondent if it goes uncontested, plus the £550 in court fees we mentioned earlier.
Then there's the small matter of settling your finances. This is usually between £5,000 and £10,000 if it doesn't go to court, but could be more if the case becomes more complicated. Your partner will probably have similar costs to pay too.
If it does involve a trip to court it could rack up £20,000-£40,000 (plus VAT). Court fees and a barrister add on extra costs — depending on the seniority of the barrister, they could range from £500 to £2,000 for a preliminary meeting and £500-£4,000 for a day's hearing in court. Again, this cost only covers one half of the couple.
So how can you call time on your marriage without spending a fortune?
Picking the right solicitor
It can be very tempting to just shop around for the cheapest quote when looking for legal advice, but remember that can be a false economy – you may save a couple of hundred pounds by going with a budget lawyer, but that may cost you thousands in the long run if they don’t get you a good deal.
Have a read of How to pick a solicitor for more.
New rules mean that all divorcing and separating couples are referred to mediation before they are allowed to go to court. This means that an independent mediator will sit down with both parties and try to come to a final agreement on how the assets will be divided, and what will happen with any children (or pets!) the couple may have.
While these rules mean that you must attend a Mediation Information and Assessment Meeting, they do not oblige you to commit to the process afterwards. Generally mediation will take two to four sessions. There is no standard fee for mediation, but it’s worth remembering that while it will likely be cheaper than heading straight to court, it may be testing emotionally, having to spend hours in a room with your soon-to-be-ex arguing over the fine details of your split.
Collaboration works in a similar way to mediation, in that both parties sit down to work out who gets what, outside of the courtroom.
However, the difference is that the process can involve far more than just the two parties and an independent mediator. With collaboration, each party will not only have their lawyers present, but there may be all sorts of other professionals involved too, from accountants and life coaches to children’s counsellors.
The idea is that this way, you reach the fairest outcome, whereas with mediation there is the risk that the ‘dominant’ party may force through a better deal than is merited (for example, an unfaithful husband may hand over more than he should out of guilt, or a housewife unfamiliar with the family’s finances may get a raw deal).
The fact is that if you don’t want to spend a fortune in legal fees, avoiding a day out in court is your best bet.
I want a pre-nup!
Whenever there is a high-profile break-up, there is always a discussion of whether there was a pre-nuptial agreement in place. This is basically where both parties agree how the finances will be handled should they split up. It tends to be something the very wealthy use to ensure that should they marry a mere mortal like you and me, we can’t make off with all of their cash if it all goes awry.
Interestingly, women are the ones instigating more and more pre-nups. According to a study by Contact Law, almost two-thirds of the 200 solicitors they surveyed reported an increase in women enquiring about establishing a pre-nup in recent years. Indeed, more than one in five are now at the behest of the bride-to-be.
It’s worth remembering that a pre-nup is not actually legally binding in UK law. That said, they are legally ‘persuasive’ (in the words of Contact Law), and so long as the agreement meets certain criteria – demonstrating that independent legal advice was sought, a full financial disclosure, and establishing no undue pressure was put on either party – then there is a very good chance that the courts will uphold it.
So even before you head down the aisle, it pays to consider what should happen if the marriage doesn’t last – it could save you a fortune in the long run! Read Rise of the pre-nup for more.
This is a loveMONEY classic article which has been updated.
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