Legal fees can be difficult to manage during separation, especially where most assets are tied up in property. We explain common ways to fund family law legal costs, including JustFund, and the issues to consider before using legal finance.
One of the most common concerns we hear from clients at the beginning of a separation is not whether they need legal advice, but how they are going to pay for it.
This is particularly common where most of the family’s wealth is tied up in the family home, a business, investments or other assets.
You may have a substantial entitlement to property, but very little money available to you right now.
That can create a difficult gap.
You need advice to protect your position and work towards a property settlement, but the funds that may ultimately belong to you are not yet available.
There are several ways people fund family law proceedings. The right option depends on your circumstances.
Where possible, some clients pay their legal fees progressively from savings or income.
For relatively straightforward matters, particularly where both parties are cooperative and disclosure is provided promptly, this may be manageable.
However, family law proceedings can become more expensive where there are disputes about disclosure, property values, parenting arrangements, businesses, trusts or overseas assets, or where Court proceedings become necessary.
We provide clients with costs disclosure and estimates so that they understand the likely financial commitment as their matter progresses.
Some clients obtain assistance from parents or other family members.
If money is being provided by a family member, however, it is worth obtaining advice about whether that money is intended to be a gift or a loan.
The distinction can later become important in the property settlement itself.
Depending on your financial circumstances, you may consider conventional finance, a personal loan, mortgage redraw or refinancing.
These arrangements may involve credit assessments, security, regular repayments and interest.
Urban Law Group does not provide financial advice. Before taking out any loan or financial product, you should consider obtaining independent financial advice and carefully consider the interest, fees, repayment requirements and overall cost.
In some family law matters there may be legal options available to seek access to funds or a contribution towards legal expenses.
Whether this is available depends heavily on the circumstances, including the financial position of each party, the assets available and the nature of the proceedings.
This is something we can advise you about as part of your family law matter.
Urban Law Group is a partner firm of JustFund, a specialist Australian legal funding provider offering funding for eligible family law and estate matters.
For some clients, legal funding can bridge the period between needing legal representation now and receiving money from a property settlement later.
JustFund may provide an approved line of credit that can be used for expenses associated with a family law matter, including:
Funding is drawn as costs arise rather than necessarily borrowing the entire approved amount at the beginning.
According to JustFund, there are generally no scheduled monthly repayments while the family law matter is continuing. The amount drawn, together with applicable interest and charges, is usually repaid when the property matter is finalised or from settlement proceeds, subject to the particular funding agreement.
JustFund assesses each application separately. Eligibility is not determined simply by your current income or credit score. Among other matters, JustFund considers the nature of the case, the anticipated property settlement and the amount of funding sought.
You can read more about JustFund and its current eligibility criteria, fees and funding terms at JustFund.
If you choose to obtain funding through JustFund and your application is approved, Urban Law Group continues to act for you in the usual way.
We issue our invoices to you.
You retain responsibility for reviewing your invoice and deciding whether you approve it for payment. Once you approve an eligible invoice, JustFund can pay that invoice directly to Urban Law Group under your funding arrangement.
JustFund states that approved invoices are generally paid within 24 hours after receiving the client's approval.
Importantly, Urban Law Group does not receive a commission or referral fee from JustFund for introducing clients to its services.
Our professional obligations remain to you as our client. Your legal advice and the conduct of your case are not determined by JustFund.
Not necessarily.
Legal funding is still a form of finance and there is a cost associated with using it.
Interest and other fees may be payable, and those amounts reduce the net amount you ultimately receive from your settlement.
For some clients, using their own funds or another source of finance may be less expensive.
For others, particularly people who are asset-rich but temporarily cash-poor following separation, deferred legal funding can provide a practical way to obtain representation without making monthly repayments while the case is underway.
It can also mean that decisions about negotiations, expert evidence, mediation or Court proceedings aren't being driven solely by an immediate inability to pay a legal invoice.
The important issue is to understand the cost of the funding and compare it with the alternatives available to you.
If you're concerned about how you will fund your family law matter, tell us early.
We can give you realistic information about anticipated legal costs, discuss how the work might be staged and explain the payment arrangements available through Urban Law Group.
Where appropriate, we can also provide information about JustFund so that you can investigate whether legal funding may be available to you.
Urban Law Group provides legal advice, not financial or credit advice.
Any information we provide about JustFund or other funding arrangements is general information only. It is not a recommendation that you obtain finance or that a particular financial product is suitable for you.
JustFund is a separate business from Urban Law Group. Any application for funding is subject to JustFund's eligibility criteria and approval, and any funding agreement is entered into directly between you and JustFund.
Urban Law Group does not receive a commission or referral fee from JustFund. If funding is approved and you authorise payment of our invoices, JustFund may pay those invoices directly to Urban Law Group under your funding agreement.
You should read all relevant credit documentation carefully, understand the applicable interest, fees and repayment obligations, and obtain independent financial advice if required before entering into any funding arrangement.
JustFund: Family law and estate funding
JustFund: Compliance information
Federal Circuit and Family Court of Australia: Family law
If you'd like advice about your family law matter and an estimate of the likely legal costs involved, contact Urban Law Group to arrange an initial consultation.