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Divorce Legal costs offset Housing Benefit

  • EK40
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17 Jun 15 #463124 by EK40
Topic started by EK40
Evening all, long time since posted. Hope all well.

It looks like our daugthers divorce nears completion...long painful journey as they all are. But some light on the horizon.

One small question hopefully one of you could steer us on please.

She currently receives housing benefit to some degree. We are aware that there is a limit to how much capital she can receive without that benefit being affected.

This is being played to some extent by the stbx who is arm twisting her arm saying "she can only have figure x as her benefits will be impacted"

The capital sum that will drop out of the divorce is small...less than 13k total all considered. We are fairly sure the sum will not affect her housing benefit allowance.

However my question is, are the legal fees she has paid considered an allowance against the 13k capital figure. Those fixed costs are a little over £7k. The overall walk away sum would end up being between 6-7k pounds.

I feel fairly certain this would be a considered cost but would be very reassuring to know that. Appreciate any clarity any of you can give. Many thanks in advance

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18 Jun 15 #463143 by LittleMrMike
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My understanding of the position is that you can spend a capital sum on legitimate expenses, like legal fees, furniture and household appliances, credit card bills.

What you can''t do is, for example, is go on a world cruise to bring your capital down to the point where your housing benefit is not affected. It''s called deprivation of capital, and while you wouldn''t go to jail for it, you''d be treated as though you still had the money.

It''s a long time since I did CAB, and I''d check it if I were you just to make sure, but I don''t think I''m wrong.

LMM

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18 Jun 15 #463147 by EK40
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Hi Mike, good to hear from you.

No is all straight line stuff. The figure is a receipt based billable (and paid) sums covering nothing but her divorce fees.

She is asking the same of her solicitor but they are a little small moving to be honest. The divorce is very vanilla in terms of content and process. It was just the threat factor from the husband trying to undermine her confidence that prompted me to try clarify.

In fairness there is no actual effort to change the figure...if it''s over it''s over and yet it would be hard to imagine it could be given the paltry sum involved.

It would strike me as odd if the expense of paying one''s divorce would not be an allowable cost against it.

Appreciate you taking the time to respond as always. Many thanks

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19 Jun 15 #463174 by LittleMrMike
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I''m not quite sure what you are asking, tbh.

A Court needs to have an idea of the likely legal costs when making its adjudication.

If I''m worth say, £100K and have run up £10K in legal costs. only £90K is available for distribution. Or have I missed something ?

LMM

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19 Jun 15 #463175 by EK40
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Hi Mike.....yes can see why...substitute the word "small" for "slow" in realtion to the solicitor above and it should be clear.

But in short, exactly as you illustrate....in our case think its £16k capital, £7k legal fees = £9k

Those legal fees were paid up front as a fixed cost package. And were paid by us (parents) but again I cannot imagine that to be a problem. She has to repay them to us and indeed the solicitor will be asked to do that directly to prove the audit trail as it were.

The problem area came in that the stbx was brow beating her to believe her small amount of housing support would be affected if she insisted on taking 50% of the house sale capital. The emphasis being on getting her to accept a lower percentage of the capital to avoid loosing that benefit....how benevolent of him:)

Thanks for the clarification

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19 Jun 15 #463186 by LittleMrMike
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As far as I know. capital over £6000 will reduce housing benefit, over £16000 it disqualifies altogether.

Again, I''d check. I don''t do CAB any more.

But I believe that capital representing the proceeds of a home is disregarded for six months if it''s intended to buy a new home.

It is worth checking with a CAB.

LMM

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