How Much Does a Divorce Cost?
Divorce is expensive. An uncontested divorce can cost between $200 and $600, depending upon your state’s filing fees. And a contested divorce can cost more than $30,000. Therefore, the price of divorce is directly proportional to how much you fight with your soon-to-be-ex spouse.
Ideally, before you begin the divorce proceedings, you must have a plan to pay for the divorce costs. There are some tried-and-true options (e.g., paying out of pocket and selling assets) and other, newer ideas.
Where Do the Expenses Come From?
It’s no secret that divorce can be extremely costly, but very few people realize where all of those expenses come from. The biggest expenditure in a divorce is hiring all of the professionals that you’ll need on a competent divorce team. Depending on your circumstances, you may need to hire an attorney, a therapist, a Certified Divorce Financial Analyst, and a forensic accountant.
Out of all of these professionals, your attorney’s fees are likely to be the most expensive. Many divorce lawyers bill their clients by the hour for consultations, travel fees, and strategy sessions. In addition to these fees, you could be paying your attorney to perform trivial tasks, including making copies or tracking down important documents (such as tax returns). One tactic for minimizing the major expense of hiring a divorce attorney is making sure that all of your important documents are already copied and available for your attorney.
Time can quickly be eaten up by arguments, unnecessary phone calls, never-ending questions, and excessive emails. When couples are venting their emotional frustrations, they can forget how quickly time can add up. In order to keep expenses down, you should not use time with your attorney to share your emotions, opinions, or the details of the most recent fights with your spouse.
If there are children involved in your divorce, you might have even more expenses. A Guardian ad Litem might be required to represent your children before or during a hearing. You can also expect more fees, in order to cover the cost of the attorney’s time and negotiate custody arrangements, a visitation schedule, and child-support payments.
Most of the major expenses you can expect primarily come from court hearings associated with litigation. However, if you and your spouse cannot agree on a settlement, you will incur more attorney’s fees than you would in a mediation.
How Can You Reduce Divorce Fees?
The easiest way to save money during your divorce is to opt for a method of divorce other than litigation. Many couples attempt to pursue a do-it-yourself divorce or mediation. There are advantages to both of these divorce methods, but there are also drawbacks that you should think about. Consider the state of your marriage, and how amicable your divorce will be before you decide which method is right for both of you.
A do-it-yourself divorce often appeals to couples, because it is the least expensive way to end your marriage. While you will save a lot of money, you should be aware that a DIY divorce is extremely time-consuming. In order to file the right papers in the right place at the right time, you will need to do a lot of research and legwork. This method should only be used if you have very few marital assets, and you have no children. If you make a mistake while filing the paperwork yourself, it could be extremely costly.
Mediation is less expensive than litigation, even though you still use a divorce attorney or a third-party mediator (who is uniquely trained to help couples come to an agreement). This method will require open communication between spouses, and it is far more amicable than litigation.
In order to use either of these methods, you will need to get on the same page with your spouse and learn how to effectively communicate with him or her during this new chapter of your relationship. Opening the lines of communication could change your divorce from contested to uncontested, which could allow you to work through your issues and make a plan for splitting your assets.
Therefore, you will need to start talking about the goals that both of you have for the divorce process. But remember, this situation does not apply if you are divorcing your spouse, due to extreme anger issues, abuse, or any other situation that could put you in danger.
Is the Bottom Line the Only Thing That Matters?
Some couples get very caught up in the overall cost of divorce, and mistakenly believe that it is the only thing that matters. Your bottom line is important, but it is far more important to ensure that you get everything you are entitled to from the divorce. Therefore, it is more important to establish the instability of your financial future than it is to dwell on the immediate costs of your attorney’s fees, court-filing fees, or mediation expenses. In other words, you need to make sure that you set yourself and your children up for long-term success.
Before you file the paperwork for your divorce, identify and articulate your needs. Do not sign up for a do-it-yourself divorce because it is the easiest, least expensive thing to do right now. You do not want to let yourself be bullied into getting less than you deserve, simply because you are trying to save money on the cost of your divorce process. It is better to spend more money now—and ensure that your divorce is handled properly—than to have regrets in the future about your share of the divorce settlement.
10 Ways to Get a Divorce When You Have No Money
Because your divorce is so important, you should know how to pay for it. You can still afford a quality divorce that helps you get everything you are entitled to, even if you have no money right now. Here are the Top Ten ways to come up with a solution that allows you to establish a firm financial future for yourself.
1) Start with a Free Consultation with a Divorce Lawyer.
To review the details of your case, many divorce lawyers offer a free 30-minute or 60-minute consultation. This consultation is your chance to get free advice from a divorce attorney before paying expensive hourly fees. You can also visit multiple attorneys, in order to see which one may serve as the best fit for your case.
However, here is one word of caution: The top-tier divorce attorneys in most cities charge for an initial consultation, because they have a steady stream of clients.
2) Take Money from a Joint Account.
If you have a joint account with your spouse, you are entitled to half of it. Therefore, when you start thinking about divorce, move your half of the assets to a separate account that is only in your name. You also need to be aware of any legal consequences that this action may have in your respective state, so consult with your divorce attorney.
Do not allow your spouse to steal funds from your joint account, which would leave you with no funds to pay for your divorce.
3) Open a Secret Bank Account.
When you are contemplating a divorce, you should have a separate bank account that your spouse does not have access to. This account should only be in your name, preferably at an institution that is separate from your regular bank.
As soon as the divorce process starts, money starts to disappear. Your spouse can transfer funds or take away assets via a number of scenarios. However, you will need funds to pay for divorce expenses, including your attorney. And you also have to pay for your everyday living expenses while the process is going on.
4) Ask Friends and Family for Help.
If you go to your family or friends for help, they may be more comfortable if you structure it as a loan. To set up the repayment terms, you can find a template for a personal loan online. Then you can show your friends or family members that you are serious about paying them back.
5) Sell Unwanted Belongings.
Look around your home for items you could sell. You may have electronics, art, collectibles, physical goods, old cars, and cameras. They could help you get enough money to cover some of your bills and regular expenses. However, be careful when selling these items. Down the road, your spouse may ask you for reimbursement for any joint property.
6) Open a New Credit Account.
If your credit is good, consider getting a new credit card. I do not advocate taking out a lot of debt, as it will always come back to haunt you. However, it may be a viable option if you are struggling to cover divorce expenses—or even just buy groceries.
7) Borrow from Your Retirement and Investment Accounts.
Rules vary greatly among retirement accounts, but some will allow you to borrow from them:
- 401(k) plans will allow you to borrow 20-50% of the plan’s value at a low-interest rate.
- IRAs are more difficult to borrow against, so you may have to pay taxes and penalties. However, if you have a short-term need, you can use a rollover to have access to tax-free funds. You will need to deposit the amount you took from a qualified IRA rollover account within 60 days.
- With Investment Accounts, you have the option of taking out a margin loan. These loans are complicated, so I do not necessarily advocate them, unless you understand them in detail. If you take out loans without having a good grasp of the terms, it could hurt you in the long run.
8) Get a Home Equity Line of Credit.
With this option, you are borrowing against the value of your home, which must be worth more than you owe. This route requires a lot of approvals, including your spouse’s (if his or her name is listed on the home).
9) Try Crowdfunding Your Divorce.
Crowdfunding platforms have recently become more popular. They allow family, friends, and even strangers to donate to a cause or start a business. You can also utilize these platforms, in order to help pay for the expenses of your divorce.
There are three companies that focus on crowdfunding a divorce: Plumfund.com, DedicatingDollars.com, and FundedJustice.com. On each of these sites:
- Set up your profile.
- In the profile, explain why you need the funds.
- Publish your profile.
- Send the profile link to your friends and family.
It can be uncomfortable to let people know you need help, but every dollar helps. Each of the platforms listed above has its own rules and fees. Be sure to do your homework about each one. Since these crowdfunding platforms are dedicated to divorce, they can help you get through this difficult time.
10) Make Your Spouse Pay for Divorce.
There is an easy way to get your spouse pay for a divorce, and of course, there is the hard way. Perhaps your relationship is good, and the divorce was a mutual decision. If so, you can simply ask your spouse to cover the costs on your end, and work out your own arrangements. However, there are legal provisions that can assist you if your spouse is unwilling, or it is a complicated divorce.
Almost every state has a provision for having the higher-earning spouse pay for the cost of the divorce. The specific criteria will differ from state to state, and courts will judge on a case-by-case basis. But generally, they will want to know if you have access to money and an income—and if the other spouse can really afford to pay for the divorce. A good attorney should know the state laws, and will have an idea about your specific situation.
If the court rules in your favor, you may qualify for an advance on an equitable distribution. In other words, if your spouse will owe you alimony or child support, you can have an initial lump sum available to you, in order to pay for the costs of the divorce. However, you will have to pay those funds back over time via the deductions on the payments you receive later.