Bridging finance for divorce settlements

Why bridging finance can steady the split

Divorce is rarely just a legal process. It is a sequence of financial decisions that determine how you live next year and what you retire on decades from now. In England and Wales, applications have returned to steady pre-pandemic levels, suggesting a consistent need for practical funding solutions. The reality is that many couples delay separating because they cannot afford the immediate costs - two homes, legal fees and the cash needed to complete a fair settlement. Bridging finance can unlock equity or fund essential interim expenses so the settlement does not stall.

Understanding the pressure points helps. The total cost of a typical UK divorce is around £14,500 once legal fees, court fees and lifestyle changes are counted. Uncontested cases are cheaper while contested disputes can escalate rapidly, especially around property and pensions. Courts often begin with a 50:50 starting point for marriages over five years, covering the home, pensions and savings, then adjust for needs. That makes liquidity crucial when one party wants to stay in the family home or release equity to the other.

There is also a gendered impact that deserves attention. Women frequently see household income fall sharply in the year after separation. Many reduce paid hours because of childcare responsibilities, and too many waive pension rights to move quickly or keep the home. That trade-off can undermine retirement security. Bridging finance will not solve inequality on its own, but it can give both parties time and cashflow to achieve a balanced settlement that includes pensions, not just bricks and mortar.

No-fault divorce has simplified the legal route, with more sole applications and faster progression to financial discussions. Yet the cost-of-living squeeze still bites. When budgets are tight, a short-term loan that is secured on property or supported by a clear exit can keep negotiations constructive. Used well, bridging funds can cover a deposit for a new rental, pay legal costs to finalise a consent order, or release equity quickly so one party can remain in the home.

The goal is not debt for its own sake. It is a bridge to reach a fair agreement sooner - and avoid the long and expensive detours of contested litigation.

A good settlement values both today’s needs and tomorrow’s security - especially pensions.

Who benefits from this approach

If you have equity tied up in property but lack immediate cash to meet a settlement timeline, bridging can help. It suits separating spouses who need speed to secure alternative housing, pay legal fees without raiding pensions, or buy out a share so children can stay in the family home. It can also support those waiting on a property sale or remortgage, where timing gaps would otherwise derail negotiations. For higher-risk scenarios like second or third marriages with blended assets, short-term funding can create room to structure a robust agreement. If cashflow is strained by childcare or reduced hours, a carefully sized loan with a clear exit plan can maintain stability while you finalise the finances.

Your funding choices

1. Property-backed bridging loan - short-term finance secured on a home or buy-to-let.

2. Second charge loan - raise funds without changing your main mortgage.

3. Remortgage with further advance - release equity once a settlement is agreed.

4. Personal loan - unsecured option for smaller legal or relocation costs.

5. Credit union or community lender - often lower-cost, interest-capped lending.

6. Family loan with legal agreement - formalised support to protect both parties.

7. Mediation funding arrangement - stage payments aligned to negotiation milestones.

What it costs - and what it could save

Who is eligible

Lenders focus on asset quality, exit strategy and borrower stability. You will usually need a UK residential or investment property with sufficient equity, clear legal title and the consent of all registered owners. The exit should be credible and time-bound - typically sale of the property, a confirmed remortgage after the settlement, or receipt of funds under a consent order. Affordability is assessed on interest and fees during the term, with allowances for ongoing childcare, maintenance and household commitments. Credit history matters, but some lenders consider imperfect files if security and exit are strong. Expect anti-money laundering checks, proof of identity, evidence of income and a clear outline of the divorce timeline. If the property is jointly owned, lenders may require independent legal advice for both parties. As a UK-based retail finance broker, Kandoo can introduce you to lenders that consider divorce-related cases and help position your application with the right documents first time.

From enquiry to funds in days

1. Outline goals, timescales and exit strategy in writing.

2. Share ID, income, mortgage statements and draft consent order.

3. Obtain a current valuation or estate agent appraisal.

4. Compare lender terms, fees and early repayment costs.

5. Submit application with solicitor and conveyancer details.

6. Complete legal checks and sign loan documents.

7. Funds released to solicitor, then paid as instructed.

Upsides and trade-offs

Read this before you sign

Clarity on the exit is vital. If your plan is to sell, agree realistic pricing and timelines before you borrow. If you expect to remortgage post-settlement, check lender criteria and affordability based on your solo income. Budget for all costs, not just interest. Arrangement, valuation, legal and exit fees add up quickly, and dual-housing expenses can persist longer than expected. Protect long-term security by including pensions in the settlement. Pension sharing can offset years of childcare and part-time work, and overlooking it can create hardship in retirement. Understand how recent tax rules treat transfers of the family home within a formal settlement, and seek tailored advice. Finally, ensure both parties receive independent legal advice, and if there are safety concerns, speak to a specialist service before discussing financial arrangements.

Alternatives worth exploring

1. Mediation or collaborative law to reduce contested legal costs.

2. Remortgage or further advance once a consent order is agreed.

3. Second charge loan as a potentially cheaper secured option.

4. Credit union or community development finance for smaller needs.

5. Structured payment schedule within the consent order.

6. Downsizing or staged sale to release equity gradually.

7. Family support formalised with a deed of loan.

Frequently asked questions

Q: What exactly is a bridging loan in divorce? A: It is short-term finance secured on property to provide cash during negotiations, often repaid by sale or remortgage once the settlement is finalised.

Q: How long does bridging finance last? A: Terms are typically a few months up to around a year. Choose a duration that matches a realistic sale or refinance timeline with contingency.

Q: Will poor credit stop me getting a bridge? A: Not always. Strong security and a clear exit can outweigh credit blips, but pricing may be higher and lender choice narrower.

Q: Can I use a bridge to buy out my ex-partner’s share? A: Yes, subject to valuation, equity and legal advice. Funds can be used to equalise shares so one party remains in the home.

Q: Is bridging cheaper than litigation? A: Often. Interest and fees can still be substantial, but avoiding a contested dispute that runs for months can reduce total outlay.

Q: Do I still need a consent order? A: Yes. A court-approved consent order confirms the financial agreement, protects both parties and can be essential for remortgage plans.

Q: What about pensions - should they be included? A: Absolutely. Pension sharing or offsetting is key to long-term fairness, particularly where one partner paused career progression for childcare.

How Kandoo can help

Kandoo is a UK-based retail finance broker. We connect you to a panel of lenders that consider divorce-related cases, including bridging and secured loans. We help you compare terms, understand fees and structure a realistic exit. Speak to us early so funding aligns with your legal timetable and supports a balanced settlement.

Important information

This guide is for information only and is not financial or legal advice. Bridging finance is secured on property and your home may be repossessed if you do not keep up repayments. Always seek independent legal and financial advice.