Legal

Private Banks Lending to Fund UK Divorces

Nick Parmee, 4 March 2009

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Lending by private banks to wealthy individuals divorcing their partners is readily available, according to law firm
Boodle Hatfield.



London is widely acknowledged as the world's capital for divorce. Yet individuals separating from their partners will often find themselves without easy access to money to fund their divorce - a gap being willingly filled by

London's private banks.

Anne Kay, a solicitor at Boodle Hatfield and a divorce law expert, said: "We are regularly approached by private banks wishing to introduce and offer this service to our clients.  The credit crunch does not seem to have curtailed this kind of lending."

In earlier times, an individual would have been able to make an order through the courts directing an estranged spouse to release money to fund a divorce.

Ms Kay said: "The courts are now reluctant to take this route and now look for evidence of a failed loan application before directing the husband to make funds available.  This has undoubtedly encouraged the private banks.

"Private banks may be lending anywhere between £30,000 (about $42,000) and £400,000 on the basis that it will be repaid following the divorce settlement.  The banks are building a relationship with a private wealthy individual who will most likely choose to continue to bank with that firm when separated.  It is good business for them."

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