January divorce spike could push thousands into debt

Dubbed ‘divorce month’, January has famously been cited as the time of the year when family lawyers see a surge in those looking to end their marriages.

According to current data from Google,  searches for ‘divorce’ in the week beginning 11th January are at their highest in 12 months in the UK.

Family lawyers also see a marked increase in divorce and separation enquiries, with Stowe Family Law seeing a 20% increase and Susan Howarth & Co routinely reporting a rise of up to 40% in divorce-related enquiries in January. This is backed by the Ministry of Justice, which sees divorce applications in Q1 of a year statistically higher than the rest of the year.

Data from debt management firm Lowell has revealed that divorce is one of the main drivers for couples falling into debt. According to a survey which looked at how couples manage debt after a separation, people found the following situations stressful: what to do with the marital home and any outstanding mortgage (46%), paying off debts their partner had accrued (45%) Having their own credit score impacted by their partner’s behaviour (31%). Agreeing on how to split savings, investments, and other funds (30%).

When applied to the national scale, the figures suggest that thousands will be at risk of falling into debt. The UK sees roughly 102,678 divorces each year, according to official ONS figures, averaging 8,556 per month. January’s 20% surge in enquiries translates to around 10,267 divorces, or over 20,000 individuals.

Using Lowell’s survey as a guide, around 45% of these people could face serious financial pressure, meaning 9,240 people may be at risk of falling into debt in January alone. The “Divorce Month” spike itself could account for 1,848 extra people falling into debt.

John Pears, UK CEO at Lowell said “One of the biggest drivers of debt that we see is separation and divorce, third only to job loss and illness. Divorce debt can come from many sources such as the sudden increase in living costs now that each person has to run a household alone, outstanding shared bills, or even the legal fees involved in separating. We even see couples often discovering debts their partner had accumulated during the marriage, sometimes without even knowing about them.

“Households that were managing perfectly well together can quickly find themselves struggling once they split. Rent that was previously affordable on two incomes can become overwhelming when living alone, credit cards can start to creep up, and small debts can snowball.

“We regularly see people who never had financial problems before suddenly facing the stress of debt on top of the emotional impact of separation. For many, it’s a chain reaction: the divorce triggers debt, and that debt can take months or even years to recover from.”