If you’ve already separated from your spouse, moved out of the home you previously shared with your spouse, and you both agree on the terms of your divorce, the cost of your divorce in Texas is likely to be something you can cover without stretching your budget. If this is not your situation, the cost of a divorce can be significant, possibly to the point that you are unable to pay for it on your own. In this post we will explore the cost of divorce, how to minimize the cost, help you understand when you will need to pay for these expenses, and provide some ideas of how to pay for your divorce. Our goal is to help you create a strategy that relieves the financial stresses and lets you focus on what is really important as you go through a significant change in your life.
How Much Will My Divorce Cost?
The average cost of a divorce in Texas where both parties do not agree on the terms ranges from $15,000 to $25,000 depending on whether you have children or not, and a vast majority of those expenses are made up of attorney fees. The rest of the expenses are usually made up of the cost of moving and replacing the items that your spouse received in the divorce. Purchasing a house often requires 5%-20% of the home's value in the form of a down payment. On the lower end, if you plan to rent, it is likely that you will need to be able to cover a few month’s rent up front. A divorce may also include going from two incomes down to one which can add additional financial strain to the situation.
The Split can help you estimate the cost of your divorce by joining and completing our discreet survey. Our survey allows us to calculate a cost based on your specific situation for a detailed look at the costs you should expect. The Split is completely free to use, and your information will never be sold or provided to anyone by The Split.
How Do I Limit The Cost of My Divorce?
The number one way you can decrease the cost of your divorce is to find a way to agree with your spouse on the terms of the divorce without using your attorneys to fight each other. Using an attorney makes sense in most cases to ensure that your divorce is fair, but fighting through your attorneys is where some couples go wrong. In Texas, with the exception of child custody, the lines of what is considered fair in court are fairly clear. If you and your spouse disagree, you can avoid senseless spending by researching the topic using The Split’s resources and coming to a mutual agreement based on what the law is likely to dictate.
Another consideration is to make sure you are organized before you speak with your attorney, and take good notes during your conversations. Attorneys typically bill in increments by minutes based on an hourly rate of $250-$600+ per hour. This means a 5 minute phone call with your attorney, or the time it takes your attorney to read and reply to an email from you, can cost from $20 to $50+. Getting organized before each call can help you minimize the time it takes on your interactions with your attorney and staying organized will prevent you from having to pay your attorney to repeat themselves.
When Will I Need To Pay For Expenses Related To My Divorce?
If you are in a simple divorce situation with no disagreements, very few assets to divide, and you opt to take the risk of not using attorneys, the only expenses to be prepared for are likely going to be a few small fees to file for divorce either online or in person at your county courthouse. From there you’ll need to plan for your moving expenses at a time that makes the most sense for your budget.
For a more complicated situation, typically the expenses begin by paying a retainer fee to your attorney. The initial retainer fees will depend on the attorney and how complicated your case is. Attorneys typically work off of billable hours and the retainer fee is usually tied to the number of hours they think your case will take. Given that some divorces can cost a large amount of money, your attorney may opt to take a portion of the total anticipated cost up front and bill you for additional hours as they occur on a monthly basis. A typical arrangement would be in the $3,500 to $10,000 range for the initial retainer. An extremely simple divorce where your attorney is only filing the paperwork and verifying that what you're receiving is fair may fall on the lower end of this range, and additional hours may not have to be billed. For a more complicated divorce with child custody disputes, the initial retainer on the higher end of this range could be consumed within a month or two, requiring that additional hours are billed as used from that point forward.
It’s normally smart to move out of the home you share with your spouse after your divorce is finalized to ensure that you get the best settlement possible. Read our article on h in ow to determine when you should move out of the home you share with your spouse here for more information.
How Should I Pay For My Divorce?
Ideally, you would find a way to pay for your divorce out of your own pocket. With the cost of a more complicated divorce running in the tens of thousands of dollars, that is not always possible for a lot of people.
The first option is to raise money to help get through your divorces by reaching out to your closest family members. Even if the money you receive from these family members is considered a loan, in most cases the loan will come without an interest payment.
If you don’t have the funds necessary to get through your divorce with the outcome you want, and borrowing from family members is not possible, a good option may be to take out a personal loan. These loans are typically not marketed for use to fund a divorce, but the reason for your loan does not normally need to be disclosed. These loans are available from several sources ranging from your local bank branch to online only sources such as SoFi or Ally bank. The rates will vary depending on several factors, but they can typically be found in ranges from 4% to 35% depending on the current economic situation. NerdWallet is a good resource for reviewing current personal loan rates. These loans are typically available in a range from $2,000 to $100,000.
Though many attorneys do not offer payment plans, some do. If an attorney does offer a payment plan, it’s often going to be serviced through another company so that they will still be paid up front. A good example of this is an attorney who uses LawPay to bill clients. LawPay offers a Client Credit service that allows attorneys to be paid up front by LawPay while allowing the client to make payments to Lawpay over time. It’s a good idea to consult with your attorney on these options during your initial consultation to see if a payment plan is available.
The last consideration for funding your divorce would normally be a credit card. These typically have very high interest rates making this the last resort option. The spending limit is also fairly low compared to the cost of a complicated divorce. In certain situations they could be the right tool to help you get through your divorce. Certain cards may offer 0% interest on purchases during the first year. If you have a relatively simple divorce, have good credit, and believe you will be able to pay your credit card company back within the first year, this may be an excellent option. For situations however, a credit card should be a last resort.
It is extremely important that you invest the time required to make the best decision when it comes to taking on debt to fund something like a divorce. It would be wise to consult with a financial advisor before you start applying for loans and credit cards. A good financial advisor will be able to assess your current financial situation and help you make the best decision for you. Their advice is normally free of charge, especially if you are already investing money with or purchasing insurance through your financial advisor. If you don’t have a financial advisor already, that may be enough incentive for a new advisor to help you at no cost in hopes that you will invest with them in the future.
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