# Divorce calculator for simple interest

As I confessed in an earlier post, I can’t resist a good divorce calculator.  I was talking then about a divorce calculator for journey costs.  The thingymajig  below calculates simple interest on a given sum. I know, you could probably do the maths in your head, but in a lighthearted way, I want to highlight the usefulness of interest in divorce and separation cases.

## A divorce calculator for interest

• In a divorce settlement, your spouse may offer to pay you a lump sum.  The lump sum may be to compensate you for, as an example, transferring over the interest in the matrimonial home.  But the problem is, your spouse says you will will have to wait for the whole sum or part of it.  If you agree to wait then the money is not sitting in your account earning interest.  Yes, I know that savings rates are rubbish but, in the legal world, cash is king.  If I am going to agree to my client waiting to get their hands on an agreed lump sum I will ask for interest at the court rate.  That, by the way, is 8%.  Yes, I do mean 8%.  If you can find a savings account offering anything near 8% then I’m a monkey’s uncle.  So demand interest.
• You have separated from the partner of your children.  You want to agree child maintenance.  You realise that inflation will eat into the value of the payments as time goes by.  So, you agree to increase the payments on an annual basis by a set percentage.  The figure is up for agreement although you can of course vary it each year.  Inflation last year was 2.7% so you would want to agree at least 3% to keep pace with inflation.
• In a divorce or a co-habitee separation one of the parties pays off a joint debt.  It is agreed that half of the sum paid out will be reimbursed but there is a worry that the commitment to repay may fade with time.  You can agree to apply a relatively high rate of interest on the unpaid sum so there is an incentive not to delay payment.  Example: John has a credit card debt of £7,000.  It is agreed with his ex-partner, Sue, that at least £6,000 of that sum was for joint spending.  John agrees to pay off the whole sum but Sue will owe him a ‘credit’ of £3,000.  Sue does not seem very focussed on when or how she will re-pay John the £3,000.  So, before paying off the credit card liability, John and Sue agree that he will be paid back the £3,000 within 28 days.  But in the absence of payment at day 28, interest will run at 8% until it is paid off.  Sue therefore needs to get a move on.

I will try to track down some other calculators that I think might be useful in a family law situation. Don’t knock it – it keeps me off the streets.