How can I pay for my divorce? Should I borrow money from Mum and Dad?
The process of divorce, including sorting out finances and where the children are going to spend their time, can be costly. Using the court is most expensive and there are preferable less costly options, including Mediation. Whilst you can save a lot of costs, the practical question, “how do I fund my divorce?” will always remain.
You may be fortunate to have friends or family who will support you but you need to understand whether that is the best way forward.
When negotiating a settlement your assets and liabilities are looked at together. A court may consider a loan from a parent to be a “soft” loan.
Soft loans contrast with a hard loan, such as a bank loan, or money borrowed from other institutions.
If you don’t have savings, then you should think carefully whether you should get a loan from a bank or borrow money from family and friends. If you are to borrow money from family or friends, the court may not consider these debts to be liabilities.
This is because some loans from family or friends, especially parents, are considered soft loans. Why soft? Because soft loans are sometimes considered by a Court not to be repayable, and therefore not a liability which should not be considered when deciding the overall division of assets.
You may not think this is fair and you or your parents be out of pocket.
In a case in 2022, the Court gave a list of indicators it would consider when deciding whether a loan is a soft loan or a hard loan.
If you want to know what might happen in your case, we are here to help you. We are a specialist family firm of Solicitors based in Oakham, representing people in Melton Mowbray, Stamford, Leicester, Leicestershire, and Lincolnshire. If you would like help from a family lawyer concerning the breakdown of your relationship, please call us on 01572 490 660 or complete a Free Online Enquiry.