You’ve finally got your divorce sorted, but now you’re worth half (or less) of what you used to be. Here’s how to get your hands on some cash, fast.

Credit unions
Credit cards
Bank overdraft
Endowments
Family
Your employer
Savings

As well as remortgaging your property and finding a better deal (see Mortgage for One), there are loads of options available to help you stay solvent.

Credit unions: There are 400 credit unions (CUs) in the UK, with which 400,000 people have savings accounts or loans. In Ireland, half the population are members, but CUs are still something of a secret in the UK. 
Borrowing rates are fairly good – usually 1 per cent per month, equal to 12.7 per cent a year. Rates are fairly attractive, since all members have to have a connection with the aims of the union (they live or work in its catchment area, usually) and, as a consequence, there is a community ethos which helps keep default rates low.  See www.abcul.coop to find out if there is a union you could apply to.

Credit cards: If you are really good with money, then you can use your credit cards as a short term cash facility. The ideal way to use them is to have one or two as an insurance policy and then, if you are short of cash at a certain time, to buy things on the card instead of paying cash (avoid getting cash out directly as you’ll pay more for it). But you need to know that you can pay off the balance – usually within three or four weeks – before you start being charged interest.

Bank overdraft: If you only need to borrow a small amount, a bank overdraft can be the answer. But resist the temptation unless you really need it – fees and high interest rates mean you often end up liable for much more than you originally wanted.

Endowments: If you have a mortgage you may also have an endowment policy – a savings plan which is intended to mature at the time you need to pay off your mortgage. Many divorcees who sell their family home also sell their endowments. You can surrender your policy to the insurance company that provides it and they will give you a capital sum in return. Or, you can often get a better price by selling it on: try Googling ‘traded endowments’ and you will find several brokers in this market. Independent financial adviser, Garry Spencer, of Wilbury Financial Management (call 01903 213 222), said: “You may be able to borrow against your endowment, which could be far better value as you can get a poor deal if you bail out early. Ask your insurance company if they can give you a loan.”

Family: If you’re really short of cash, your family might be able to help. Speak to your parents about getting an early share of the inheritance – this also makes sense from a tax point of view.

Your employer: If you find yourself living from pay cheque to paycheque, see if your employer offers a season ticket loan, which you can usually repay at zero interest, over the year. Ask your personnel office (or your trade union) for a list of other benefits on offer, as they are often poorly publicised.

Savings: Many people have old savings accounts they have forgotten about or are reluctant to use up. Dormant, forgotten accounts are thought to add up to several billion pounds for the UK as a whole. You could have old Premium Bonds or shares from a privatisation or an old Personal Equity Plan, for instance, so check it out.

---

InsideDivorce.com recommends
For more advice on starting a new relationship or divorce recovery read articles in our finance section.