How to pay for a divorce can present a challenge for some people in Texas. Options might include taking out a personal loan, using a credit card, using savings or borrowing from family. Each of these approaches could have advantages and disadvantages.
A personal loan may have lower interest rates than a credit card, but a credit card can allow people to borrow money as it is needed. Furthermore, a debt paid off quickly on a credit card with 0% APR can incur no interest at all. With a personal loan, it might be necessary to take out a large lump sum or apply for a new loan every time more money is needed. Using savings or borrowing from family may incur no interest, but using savings may be difficult if this is a shared marital asset. Using up savings can also leave a person with no money to help with the transition after divorce. Borrowing from family members could create a strain if it cannot be paid back promptly.
A personal loan does not require collateral, but this does not mean that everyone will qualify for it. Using a credit card may require more discipline than a personal loan since payments are not fixed. It might also be tempting to charge other things on the credit card that are not strictly necessary.
People may want to discuss these expenditures and other financial issues with an attorney before filing for divorce. In Texas, a community property state, most debts or assets acquired after marriage are considered equally owned marital property. This could have implications for a person who wants to use savings or go into debt to pay for a divorce. An attorney may be able to advise a person regarding the possibilities for property division.