Personal Loans

How Expensive Is It to Get Divorced in Singapore?

When marriages end, it can be tragic for all parties involved. For that reason, many individuals would rather not think about divorce and its financial consequences. While this event can be extremely painful for families, it is important to be aware of the costs associated with divorce.

While the vast majority of marriages are successful, about 7,000 relationships end in divorce every year in Singapore. This figure is significantly higher than in earlier decades, when divorce was much less common. For example, the number of divorces has nearly doubled since the early 1990s. Sadly, this means that more couples have been going through this unhappy process. In addition to the emotional burden, this very unpleasant life-event can be very expensive. This article explores the various costs of getting divorced.

Total Number of Divorces in Singapore, Annually

Primary Cost of Divorce: Legal Fees

Many divorces require hiring a lawyer to help individuals navigate the complexities of the legal process. The cost of hiring a lawyer to assist you with your divorce depends on a few factors. The primary driver of legal costs is the divorce type. For instance, in uncontested divorces in which both parties agree to all terms of the divorce, legal fees tend to be around S$1,500 to S$3,000, much cheaper than in contested divorces. This fee covers the drafting and filing of required documents, court fees and other fees, and these "simpler" type of divorce proceedings tend to last for 3 to 6 months. On the other hand, the legal fees associated with a contested divorce typically range from S$10,000 to S$35,000. These figures include additional compensation for trials, drafting, filing and responding to pleadings and attending status conferences and mediation sessions. Contested divorce proceedings typically last for 6 months to a year, but can last much longer and cost more if it is a closely contested case.

Estimated Cost of Getting Divorced in Singapore

Other Financial Consequences of Divorce

While legal fees are often the biggest expenses associated with most divorces, there are other major implications for divorcees. For example, one of the most significant financial impacts of divorce is the division of matrimonial assets. This means that court will try to divide the value of the couple's assets (e.g. homes, cars, etc.) in a "just and equitable" way. While gifts and inheritances are typically excluded from this process, nearly all other assets are included, such as assets acquired by either individual during the marriage or those that increased in value during the marriage. Because dividing up these assets can be a complicated and contentious process, it may be useful to be working with a lawyer throughout the proceedings.

In addition to dividing a couple's assets, individuals going through a divorce will have to consider children and spousal fees. These fees, which are determined in court, exist to ensure that children and former spouses are financially stable following a divorce. The required fee amount varies based on the each party's financial situation and the educational needs of the child. For example, judges will consider the party's ages, physical or mental disabilities, standard of living prior to the divorce and duration of the marriage. Additionally, it is important to know that divorcees may be required a recurring monthly payment to their former spouses for a long time. Once again, this process can be very complicated, making it helpful to have the assistance of a lawyer.

Additionally, divorcees typically need to find a new housing situation, which can be an expensive and difficult process. While it is possible to rent a flat rather than purchase an additional home, individuals may prefer a particular neighborhood in order to maintain proximity to their job or children. This transition can result in an additional financial cost of thousands of dollars a month in rent or mortgage, depending on the neighborhood.

How to Be Financial Prepared for a Divorce

Hopefully you will never have experience the emotional turbulence and financial cost of a divorce. If you are unlucky enough to go through this process, it can help to have savings in order to cover the associated legal fees. However, some people may not have sufficient savings in order to cover the cost of a longer, more expensive contested divorce and may need to resort to a personal loan in order to cover their legal fees. Clearly, this is not the most desirable option, as interest payments can add hundreds of dollars to an already expensive ordeal. With that said, some personal loans charge significantly lower interest rates than others. For example, POSB & DBS charge the lowest interest rate (3.88%) of any bank in Singapore for its personal loans, making their financing the cheapest option for applicants that are approved. Alternatively, low-income borrowers may be interested in Standard Chartered's CashOne personal loan, which offers the most competitive rates for those with annual incomes of less than S$30,000.

Finally, while this article aims to provide estimates regarding the financial burden of a divorce, it should not be misinterpreted as legal advice. We strongly suggest that individuals considering a divorce reach out to a lawyer. We also recommend that you request rates from prospective lawyers and estimate the total cost your divorce process in order to make it as financially insignificant as possible. Divorce can be a sad and volatile time for families. Therefore, it is important to be financially prepared in order to make the process as smooth as possible.

William Hofmann

William is a Product Manager at ValueChampion Singapore, helping consumers and SMEs find the best banking products through comprehensive analysis of data. He previously was an Economic Consultant at Industrial Economics Inc, where he conducted a variety of research and economic analyses. He graduated from University of Vermont with degrees in Economics and Psychology. His work has been featured on a variety of major media such as the Straits Times, the Business Times, the Edge, DailySocial, the Entrepreneur and more.

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