Divorce sometimes comes out of the blue. It’s not always the kind of event you can save up for, and the process can be quite pricey. The costs of a highly contested divorce can easily amount to what you might spend on an automobile or a down payment on a home. This can be especially unfair when one spouse has significant financial resources, and the other spouse has none. Some state laws anticipate this and have safeguards against it. If your state doesn’t, you might have to get creative about raising cash.
Draw cash advances on your credit cards, if you have any. If they’re joint cards, the court will probably assign these debts to you in the divorce, but you can pay them off monthly.
Ask your family for help. If you and your spouse don’t have much in the way of assets that you can liquidate after the divorce to pay them back, it’s best to borrow money from those who will be understanding if it takes you a while to reimburse them.
Cash in or borrow from your retirement plan, if you have one, and if you absolutely must. Depending on your state’s laws and whether or not you accumulated the fund while you were married, the court might consider it marital property. At best, you might have to reimburse your spouse for his interest in it by giving up another item of marital property equal in value to his portion. At worst, you could suffer tax consequences for the early withdrawal.
Sell or liquidate property. This could include personal items, such as jewelry, that a judge would most likely award to you anyway, or joint assets, such as an investment account. You should only liquidate joint assets as a last resort, however. If you have to do it, put half the cash aside in a separate account or withdraw only half the funds. By rights, half the asset belongs to your spouse unless and until a court says otherwise. You might consult with an attorney about what you can and cannot do before proceeding with liquidating property.
You can represent yourself for a fraction of the cost of retaining an attorney, but most courts expect pro se litigants, or those acting without legal representation, to have a reasonable grasp of the law, court rules and court procedures. If you simply can’t raise the money in any other way, and you must take this route, consider consulting with an attorney on an hourly basis. You can prepare your own documents, then pay his hourly rate to have him review them, rather than come up with a substantial retainer fee. Most states allow you to apply to the court to waive filing fees for your divorce documents if you don’t have the money for them.
Some states, such as Illinois, have legislation directing that spouses equally use marital assets and funds to pay divorce fees and costs. In Illinois, this is referred to as the “leveling the playing field law.” It prevents one spouse from retaining the best attorney in the county while the other has to represent herself for lack of funds. If all else fails, call your local bar association to find out if your state has similar legislation or to direct you to an attorney who might be willing to work with you on his fees until he can file a motion with the court to compel your spouse to pay for your attorney as well.
If you have to cash in your IRA, one way to minimize the tax bite is to roll over a portion into a similar account in the name of your spouse at the time you liquidate it. You’ll probably have to surrender some of it to him anyway if the account is marital. If you do a rollover, you'll only have to pay penalties and taxes on the portion you cash out for your own use; the other portion is your spouse's tax problem, depending on what he does with it. The down side to this is you may end up giving him more than a judge would order, and it would require a cooperative relationship with your spouse. He might not want to help you raise money for a good attorney.
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