20 Jul Do You Need a Divorce Loan?
In the United States, debt is no foreign concept. According to a 2021 CNBC report, the average American has $90,460 in debt. When it comes to loans, 19.4 million Americans have personal loans.
People take loans for a myriad of reasons. Education is the most common one, as a mortgage. What you may not know is that you can take divorce loans.
The Cost of Divorce
The cost of divorce can vary. In the United States, the average cost of a divorce is $11,300. If the case goes to trial, that number is easily higher. Even so, 4 out of 10 Americans getting divorced paid less than $5,000 in attorney’s fees.
Divorce ranges in cost for a variety of reasons. An uncontested divorce, where both spouses agree on everything, is much faster and less costly than a contested one. Costs add up if there is a contentious custody battle or disagreement over assets.
Whether your divorce is closer to the average or closer to 40%, it is still no small amount. If you are in a financially tight situation or are a stay-at-home parent, paying that amount outright might not be feasible. Similarly, if you share all of your income with your spouse and they control where it goes, you won’t be able to access those funds. Some people become trapped in a marriage for this reason. Divorce loans can get you out of that situation.
What is a Divorce Loan?
Divorce loans are loans used to help pay for the cost of getting a divorce. It can be used to cover attorney’s fees, filing fees, and any other court fees.
While you might have assets that can help you afford the cost of a divorce, selling those, in the beginning, might not be feasible. The property could be marital property and will be assessed in the settlement. A loan also gives you the opportunity to pay the costs out over time instead of as you owe it upfront. The loan will be the same as any other personal loan and have interest rates, but you might be able to pay it off easier once your assets are split and the divorce is finalized.
Qualifying for a Divorce Loan
Companies specializing in divorce financing will examine your case. The amount of money you are offered depends on the amount of money you can expect to get when your divorce is finalized. As with any loan, not everyone qualifies for a divorce loan. You need to have a repayment strategy in place. For some, that may involve re-entering the workforce if they were a stay at home parents. You also may be able to use part of your settlement to pay it off.
To qualify for a divorce loan, you’ll need to meet two requirements:
- Your credit score should be between 670 to 850 to qualify for a low-interest personal loan. Unsecured personal loans may not be available to people with credit scores below the fair range (less than 670).
- You need to have a consistent source of income to ensure that you can repay the loan
If you are considering a divorce loan, be sure to research interest rates, loan amounts, terms, and fees. These can significantly alter the money you owe.
Can an Attorney Help?
When it comes to the loan, you will need to talk to a financial specialist or a loan company. Speaking to an attorney can also help. If you are in the Dallas Fort Worth area, Navarrette Bowen P.C. has a team of experienced divorce lawyers. Contact us today for a free consultation.
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