K J Smith Solicitors

Resolution allies with credit provider to help couples fund separation

Published: 10 April 2014

National organisation of family lawyers Resolution have revealed that they can now offer unsecured loans to help separating couples fund court cases, due to a new partnership with credit provider Iceberg Client Credit.

Whilst there are funding options available to help with the cost of proceedings for high cost cases or for those on higher incomes, this new service from Resolution is the first of its kind as it is available to clients on lower incomes who would not have otherwise been able to fund proceedings until after their divorce has been finalised.

A large number of cuts have already been made to remove legal aid from the majority of private family cases, making it difficult for separating couples to be able to afford legal advice and representation.

Separating couples have also been punished by the 2014 budget with the announcement of changes to the tax status on properties owned by separating or divorcing couples. A divorced or separated person who had moved out of a couple’s home could continue to claim tax relief on properties they owned or jointly owned, even if their former partner still lived in the home provided the former did not declare another property their tax-free residence. The tax-free period has now been reduced from three years to 18 months, so tax will become due on properties not occupied by their owner for longer than that period.

Whilst the past 12 months have been difficult for separating and divorcing couples due to changes in legislation, this timely new service from Resolution should provide an upturn in fortune by helping many couples to fund essential legal services.

The new service is exclusively to members of Resolution and will give clients access to a loan on a preferential rate, with the repayment due only after their case has been settled. The new loan service will also help family law firms as they are able to grant their clients access to funding without having to put their own cashflow at risk.

"These are times of unprecedented change for family lawyers and firms of all sizes are watching their cashflow more closely than ever. This will help our members to help more people – something we’re all keen to do, but has become more challenging since the cuts to family legal aid just over a year ago", said incoming chair Jo Edwards.

Partner at Iceberg Client Credit, Nick Sanders, said "We believe this service will be hugely beneficial and attractive for those clients with a limited income, as they will have no application fees and the loan is unsecured, meaning there is no risk to any other assets they hold.

"It also means the risk to Resolution members is minimised, as they can insure against any shortfall in the settlement value as compared with costs.

"Plus the service will be straightforward to access, with each member provided with a dedicated secure online homepage to manage all aspects of their clients’ loans."

A spokesperson for the Law Society said, "Any initiative which helps solicitors to make their services more accessible to potential clients in the wake of legal aid cuts is welcome."

K J Smith Solicitors are members of Resolution and are an experienced family law firm who work tirelessly to provide positive solutions for all our clients. If you need expert family law advice or you wish to discuss your circumstances, please contact us today to arrange a free 45 min consultation on 01491 630000 (Henley on Thames), 0118 418 1000 (Reading), 01753 325000 (Windsor) or 020 7070 0330 (Central London).

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