When you know exactly why this happened, you can stop blaming yourself. Here is the full picture — plainly and honestly.
General guidance only. This page does not constitute legal or financial advice.
You were facing a contested divorce. Your husband had access to the money. Your solicitor needed to be paid. Someone offered you a way to fund your case — and it was presented as the obvious, sensible, necessary option.
The agreement was complicated. The repayment terms were dense. You were in crisis, overwhelmed, and trusting that the professionals involved had your best interests at heart.
When the dust settled, the loan had eaten a significant portion of what you won — or left you in debt even when you had little left to take.
“Divorce litigation funding has become a system that drains every penny from loans taken out by women — while they and their families carry all the risk.”
A litigation loan is money provided by a third-party funder — not a bank, not the government — to pay the legal costs of your divorce. In return, the funder receives repayment plus interest, usually taken from your divorce settlement.
In theory: it levels the playing field when one spouse controls all the money. In practice: the risks are structural and serious, and they are rarely explained with sufficient clarity.
Most women who end up in debt from litigation funding are not there because they were irresponsible. They are there because of specific, structural features of how these loans work:
The interest on a litigation loan compounds monthly. A £25,000 loan at 18% per annum on a 3-year case does not cost £25,000 — it can cost £40,000 or more. Contested divorces regularly run 2–4 years. This was almost certainly not modelled for you at the outset.
In many funding structures, the longer the case runs, the more interest the funder earns. There is no financial incentive for the funder to push for early resolution. Your interests and theirs are not aligned.
Many solicitors have established referral relationships with specific funders. This is legal — but it creates a conflict of interest that is rarely disclosed to clients. You may never have been told this arrangement existed.
When the settlement is reached, the funder recovers the full loan plus all accrued interest before you receive anything. If the settlement was smaller than projected, you may receive nothing, and still owe money.
If you dismissed your solicitor during proceedings — because you could no longer afford the relationship, or were pressured into settlement — the funding agreement remained. Exit clauses, default interest, and early termination fees may have applied.
The removal of legal aid from most family cases under the Legal Aid, Sentencing and Punishment of Offenders Act 2013 (LASPO) created a vacuum. Litigation funders stepped into that vacuum. They are largely unregulated in the family law context — they are not subject to the same consumer credit protections that apply to bank loans.
The more women speak out — anonymously if they choose — the stronger the evidence base for regulatory change. You can share your experience through our secure story submission form.
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