Separation is hard enough without having to worry about how you are going to pay for it while still keeping everyone fed. But there are a few simple tricks and a few services out there that will help you cover the cost of your separation .

A perfect storm of stress

Help! how do I pay for my separation and live as well? On a scale of the things so stressful they can affect out health and wellbeing, marital separation and divorce are number 2 and number 3 of the top ten, running only behind the death of a partner or a child. Wow! That really puts in to perspective how stressful a separation can be. And with 95% of us also reporting that we are feeling day to day financial stress, having to work out how to pay all the bills while also going through a separation could be called a perfect storm of stress.

When Carol’s* marriage broke down suddenly and unexpectedly, she developed anxiety and insomnia as a thousand doubt’s struck her. How would she afford the mortgage working part-time? If she lost the house, how would she afford rent, and pay for childcare? And where could she go for help, and how would she pay for that? “It impacted on every role in my life. Being a daughter, being a friend, being a mother. I felt like it consumed me.” Carol said “It was a very, very overwhelming time and the only reason I got through it was because I had the support of my family. Financially I wouldn’t have been able to afford it or do it otherwise.”

In the midst of separating from her partner of 10 years, Jill* would wake in the night, terrified about becoming financially ruined. She’d spent years trying to establish herself, and had finally started to make a good income. Now all that was under threat along with the home she lived in and that fear led to panic attacks, which – several years later – have only just subsided.

For Mike* the end of his 12 year relationship wasn’t a surprise at all but the effect’s on his life were. “It had been going downhill for a while so when she said she wanted me to move out it wasn’t a total shock” Mike said. But what happened next was. “I quickly found myself not sleeping and that meant I really wasn’t 100% at work”. That just made everything worse as Mike’s boss started making subtle comments. “I felt like I had no way out, I had never had lot’s of money, I always made out ok. I just had no idea how I was going to pay for everything… and if I lost my job” Mike shrugged. “But no matter how hard I tried I just could not stop thinking and worrying about it”.

Jill’s, Carol’s and Mike’s (not their real names) stories are fairly typical of the kinds of stress and uncertainty people go through when their relationship breaks down. And one of the biggest uncertainties people face is how they will end up financially, especially when there is the prospect of significant legal costs on top of all their normal living expenses.

But luckily there are a few simple ways to pay the legal bills without having to go bankrupt.

The simple rule of family law

The simple rule in family law is the more you can agree the less it will cost you. The cost of your separation really depends on you – and your ex – and how well you can negotiate. It can not be said enough – the more you agree the less it costs. That does not mean you have to sit in a room together and be all peace and love but it does mean you have to negotiate in good faith and try to find solutions rather than roadblocks.

So how do I pay for it?

Most family lawyers will require some form of upfront payment. So when you find a lawyer you will also need to find a way to pay for them. Costs for a lawyer to handle your separation will start at around $4,000 or $5,000 if you can agree, and can go up to $200,000 or $300,000 or more if you choose to go to court and fight it out. Scary. But don’t forget, most studies estimate that only around 5% of people actually need to go through a full court process so the rest of us are looking at around $4,000 or $5,000 to get consent orders drafted and approved. And if you can really agree you may be able to split that cost between the two of you so, you could be up for only $2,000 or $2,500 each.

So with all the costs of a separated life – such as running two households – where can you find the money for lawyers? Some of the more common ways are savings, credit cards, personal loans, a line of credit, friends and family, selling assets, drawing down on equity in your home, a joint line of credit, some lawyers will organise payment terms, court ordered part payments (but these are very rare and hard to get), and legal lending.

Of these, selling assets, drawing down on home equity, and joint lines of credit will require you to come to an agreement with your ex and that will probably mean you will both fund your separation the same way.

Some lawyers will allow you to pay as you go or to pay a certain amount every week but that is reasonably rare and generally reserved for special cases.

There is a court process where you can ask the court to release funds from your joint assets to fund your legal fees. However, this is rare, it can be expensive because it means at least a day in court to argue your case, and there needs to be a significant difference in the financial resources of the two parties. So what does that mean? If one of you has a lot of money to fund your legal fees and the other has nothing the court considers that unfair and will force whichever of you has the most to give the other side some money to pay for their legal fees.

Legal lending is a fairly new way to pay for your separation. Legal lenders lend you money to cover any costs associated with your separation. That can be anything from legal fees to renovations on a house that you will sell as part of your separation agreement. The idea with legal lending is you are given a line of credit that you can access as needed for any approved costs of your separation. You then pay back what you have spent when your property separation is finalised, there are no ongoing payments. So when you come to an agreement with your ex and your property is divided you pay back the loan out of that property settlement with any associated fees. It is important to point out that you can only use legal lending to pay for legal expenses, you cant use it to pay for ongoing living expenses.

At Brightside we are pre-approved for Plenti Legal Lending so legal lending is a service we offer our clients. For details you can visit their website.

There is no doubt that separation is hard and stressful and a lot of that is out of your control, so it is very important to minimise stress where you can. One way is to organise for your legal fees to be covered so you can concentrate on and make the most of each day and unlike Jill, Carol and Mike you wont need to lie awake at night worrying about how you are going to make it all work.

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