Personal Loans

Divorce Loans on the Rise After a Turbulent Year in the United States

2020 has been a record year for the number of weddings that have had to be canceled, and as it turns out, also a very popular year to end a marriage as well – or at least file for divorce! Whether it was all that time spent cooped up together in lockdown, political arguments that were more heated than the love life, or financial strains revealing cracks in the relationship, there has certainly been an increased interest in divorce this year. When we analyzed our internal data, we found that there had been a 62% increase for divorce loans inquiries related to supporting divorce costs in the last twelve months.

To investigate this further we broke down the inquiries by state to discover which states had been struggling in both love and money the most. Of the top 10 states here, eight of them were southern states, with Tennessee, Texas and Georgia at the top of the list.

Check out the 10 states inquiring about divorce loans the most below, and how they compare to the 10 most expensive states to get divorced in and the states that have been busy Googling about divorce the most.

The 10 States Inquiring about Divorce Loans the Most in 2020

1. Tennessee – 79% increase
2. Texas – 74% increase
3. Georgia – 73% increase
4. Florida – 71% increase
5. New York – 68% increase
6. California – 67% increase
7. Arkansas – 67% increase
8. South Carolina – 63% increase
9. Alabama – 62% increase
10. Mississippi – 60% increase

The 10 most expensive states to get divorced in and the average cost*

1.California – $14,235
2. New York – $13,710
3. Delaware – $12,955
4. Massachusetts – $12,800
5. Texas – $12,700
6. New Jersey – $12,600
7. Connecticut – $12,560
8. Georgia – $11,800
9. Colorado – $11,630
10. Virginia – $11,650

 

The top 10 states searching Google for information around divorce and divorce loans in 2020:

1. Tennessee
2. Arkansas
3. Mississippi
4. Georgia
5. Alabama
6. Oklahoma
7. Texas
8. Utah
9. South Carolina
10. Kansas

The high number of loans being requested in Tennessee could be down to both the state’s relatively high divorce rate of 3.5 per 1000 people**, combined with a relatively low median household income of $81,900, which is more than $30,000 less than the average Californian household***.

The divorce rate in the US has been steadily declining in recent years, with a drop from 4 to 2.9 per 1,000 people since the year 2000**. However, a definitive divorce rate for 2020 has yet to be announced.


Best Financial Tips When You’re Thinking about Divorce

We would never encourage anyone to take out a loan without first considering their options, doing their research and considering alternatives. Here are our top three tips for approaching a divorce and deciding whether you need to take out a loan:

1. Communicate

Depending on your circumstances this may be easier said than done. But if you are able to safely maintain communication with the partner you are divorcing then it will massively help to keep everyone on the same page in ensuring a more fluid transition. Be open about finances and any difficulties that you may have, and also be open about the division of assets.

A simple guide to follow with divorces is the more there is on the table, the more time and work is required to make the divorce happen. Factors such as the number of years you have been together, the number of shared assets you have, whether you have children with your partner all play a crucial part in divorce proceedings. If both parties can be upfront about realistic intentions, this should help give a guide for how much it may cost to finance the divorce.

2. Find the right lawyer for you

It may be tempting to rush this in an attempt to speed up the whole process and choose the first attorney you find that fits the bill. It is important to take your time here. Research different attorneys, find out how much they charge, how much experience they have and if they are the right fit for you.

An attorney that may have a cheaper hourly rate could end up costing you more by spending more time on your case.

3. Compare the financial options available to you

Similar to finding the best lawyer to represent you, finding the right financial option is key. You could take a quick and easy loan that will cover the cost of the whole divorce in one go – while this may be tempting, you will most likely suffer from harsh repayments afterward.

The best thing to do is to sit down and take a look at what options are available to you with the assets that you have. What is your credit score? Are your assets tied up in other ventures? Are you the spouse with financially weaker assets, but the one that spends the most time raising the children?

These are the questions you need to be asking yourself, because after this quick analysis you should be able to say: this is what I have now, this is what I have given to this marriage, this is what I want from this divorce and these are my options for getting this result.


Ethan Taub, founder of Loanry.com, said,

“2020 has been a stressful year, more stressful than most. And sadly we have seen the strain of this year take its toll across the board, including in the marital home.

“While we never want to encourage anyone to take out a loan, the best advice we can give for couples going through the tough process of a divorce is to do your research first. Take a look at the options out there. Compare the different solutions to find the best and most affordable option for you, both immediately and years down the line.”


*Average cost of divorce for each state was calculated by adding the average divorce filing fee and attorney cost for each state taken from these two sources:

https://www.divorcewriter.com/divorce-filing-fees.aspx
https://www.lawyers.com/legal-info/family-law/divorce/
**https://www.cdc.gov/nchs/fastats/marriage-divorce.htm
*** https://dqydj.com/average-income-by-state-median-top-percentiles/

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