“A rate rise this year” and the impact on divorce
Posted on 24th October 2017
Reading the Economist I noted the headline “A rate rise this year?” Upon reading the article the Monetary Policy Committee felt that the “moment was approaching” for such a rise. More importantly, the Economist reported that Gertjan Viledghe, a member of the committee, “thinks record low unemployment, rising wages and robust household spending all indicate that the economy has strengthened.”
I am well aware that this is simply not the case for the majority of households. Individuals remain in unhappy relationships because they are worried about their future financial security. The true reality for low, middle and higher income households is that their disposable incomes are being squeezed hard.
Many individuals have not received a pay rise in the last few years, and I know most have not seen an increase in the last ten years. Most increases in salary have been swallowed up by increased foods and travel costs, utility bills – particularly council tax and childcare costs. As an example, in my local area, car parking has increased by 20% from last year. The middle income in particular, have seen a huge reduction in their disposable income.
All these issues have led to increased worry and concern for those that want to separate, but consider they simply cannot afford to. However, solutions can be found for meeting the cost of legal fees.
The law has changed dramatically in recent years to address funding and s22ZA was inserted to the Matrimonial Causes Act 1973, which allows an application to be made for “an order or orders requiring one party to the marriage to pay the other an amount for the purpose of enabling the applicant to obtain legal services for the purpose of the proceedings.” The intention is to effectively place the parties on an equal footing when embarking on divorce and financial proceedings.
It is quite the norm to now obtain the payment of legal fees from the financially wealthier party. I usually achieve this via direct negotiations with the other parties’ solicitor, or directly with the other party if they are unrepresented. In the event, that an agreement cannot be reached an application can be made to the court for a payment towards legal fees, to secure payment for past and ongoing legal fees. This alleviates the stress of the financially weaker party and it enables them to focus – which aids the quicker resolution of the matter.
Additionally, there is the option of obtaining a litigation loans and other bank loans, from a reputable provider. The loan will be considered a liability within the proceedings and will be accounted for in the settlement. If a loan is not the best way forward, then s227A can be pursued.
I know that I need to be ‘in tune’ with the financial realities of the real world to assist those that contact me. My aim is always to obtain future financial stability for my clients.