Divorce may be something you never expected to go through, but separating your finances is one key to making a fresh start. Here is how to get a fair divorce settlement.
Negotiating a divorce involves a lot of paperwork and can be a costly, emotional and stressful process. There are ways to make it easier and cheaper, though. We look at the costs involved and how to separate your assets without spending more than you need to.
To file for a divorce, you need to pay a court fee of £593 before you begin. If you are on a low income or benefits then it is possible to get help with court fees.
Solicitors charging an hourly rate could cost anything between £2,000 and £30,000, and will depend on:
How complicated your financial situation is
Whether you are trying to decide on care for your children
How much you and your partner are able to agree on
If possible, try to agree in advance how much you are willing to pay your solicitor, so you can cap how much you have to pay.
If you are still working out whether or not you and your partner should divorce, speaking to a mediator could help you resolve your differences. You should use a mediator if:
You are unable to speak to your partner You want someone impartial to help you separate
You want to avoid going through court
Relate is the main organisation in the UK that can help you with the breakdown of a relationship. If you want to discuss your financial options, or get help understanding what benefit payments you can get, visit the Citizens Advice website.
Mediation may not be right for you if your dispute is mainly about financial issues, you are not in contact with your ex, or your safety is at risk.
Find out if mediation is the right option for you on the Family Mediation Council website.
You may need a safe place to stay while you separate from your partner, and you may also be entitled to free legal aid.
There are several charities and organisations that can help you:
Refuge provides guidance on the warning signs of abuse and helps find safe housing
National Domestic Violence Helpline runs a 24-hour freephone helpline on 0808 2000 247
Women's Aid offers practical advice and support for women experiencing domestic abuse
Men's Advice Line offers help and support for men experiencing domestic violence
Galop is an LGBTQIA charity that offers help for people experiencing domestic violence
When you go through a divorce, the court will decide how your assets are split. There is no exact rule on how this is done, as each case is treated on an individual basis.
The court will review both your joint and individual bank accounts, so work out the value of any funds held by you or your partner before your divorce begins:
Savings accounts: Check your recent statements and update any saving passbooks you may have with your bank or building society
Value of your debt: Find out what debt you or your partner have in credit cards, overdrafts, loans and any other type of credit commitment
Household income: Work out how much you spend on running your home, and what disposable income you have
Valuables: If you have expensive items, get them valued and record their prices
Investment portfolio: If you have one, contact your independent financial adviser (IFA) for an update, or check your most recent documentation
Pensions: You’d be surprised how often the pension fund is actually worth more than your house, make sure you don’t forget to include it
Working out the total value of your assets will give you a good idea of how much your combined assets are worth.
You must declare all of your assets, whether they are joint or held solely by you. If you try to hide your assets, you may be fined by the court.
The primary basis for splitting assets is to make sure any children are taken care of. The courts will also look at the earning ability and financial responsibilities of both partners.
Just because you have assets in your own name, it does not mean you will automatically keep them.
If you or your spouse received an inheritance or any other money while you were married, or even while you were going through the divorce, this will be taken into account when splitting your assets. This applies whether the inheritance was given to you or your spouse.
A solicitor or Relate counsellor may be able to help you work out a financial deal before going to court, which could save you both a lot of money.
If you have debts in both your names, then you are both responsible for them. You cannot close accounts until the debts have been repaid in full, but you can ask the lender to freeze the account so no further borrowing can be accrued.
Joint financial products you have access to but are not using, like unused credit cards or joint current accounts, should be cancelled as soon as possible.
Let your creditors know you are going through a divorce, as they may be able to give you some flexibility in dealing with your finances.
If your partner disappears and cannot be contacted, you will be responsible for any joint debt they have. You will be expected to repay it all, as you are a joint signatory.
Make sure your lawyer gets financial compensation for you from the divorce settlement if this happens.
Your rights to your home depend on whether you bought your property as joint tenants or tenants in common:
Joint tenants: This means you both have equal rights to your home. If your property is sold, any profits will be split between you equally
Tenants in common: This means you own separate shares in the property. Your rights to your home depend on what percentage you have, as this may not be equal
If you have children together and you get sole custody, you will usually be awarded the property by the courts as a family home.
There are also several other options:
Sell your home and split the assets. This allows both of you to move out and put the money towards buying separate homes.
Buy your partner out. This means you will get to keep your home in exchange for paying your partner their share of the property.
Transfer part of the value of the home to your partner. This means, if they then sell the property, you will get a percentage of its value.
If you do not have any legal ownership rights over your home, you will need to prove that you have a beneficial interest. This means you were contributing towards your home, for example by paying for grocery or utility bills.
Prenuptial agreements are now legally recognised in the UK and set out any assets or property owned by you and your spouse so they can be split fairly if you separate.
If you have a prenuptial agreement, make sure your solicitor has a copy as it could help you reach a fair settlement.
You can use the calculators found on the following websites to find out what government funding and benefits you could get after you have divorced.
Standing on your own two feet can be scary, but it is a lot simpler when you break down all of your expenses into chunks.
The trick is to find cheaper alternatives for each expense, so you can have more disposable income.
Use our ultimate budget checklist to work out how much of your income goes on rent, bills, food and leisure activities and how much you have leftover to put towards a savings pot.
If you are left with debt in your own name after your divorce, there may be ways for you to reduce how much interest you pay.
Use the links below to find a better deal on the following financial products.
If you want a lower interest rate and better features from your financial products, use the following links to compare your options.
If you and your ex shared finances, they could show up on your credit record and damage your ability to get financial loans, like credit cards or mortgages.
You can disassociate from your ex by requesting a notice of disassociation form from the credit reference agencies:
You should also think about updating your will and life insurance policy to remove your ex-partner. You can either ask your solicitor to do this, or you may be able to do it yourself directly with the financial company.