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Clients: Family law

Application process

    What is the loan application process?

    The first step is a conversation with your solicitor to understand the funding options available to you. If you choose to go ahead with a Novitas loan, your solicitor will complete and submit an online application and you will receive an email from us to approve it.

    Once you have approved the application, it can take up to three weeks to get the loan in place. It may take longer if queries arise from your application or credit search.

    If we approve your loan, we will send you our agreement pack for you to consider. If you wish to proceed, you will need to obtain independent legal advice to ensure you fully understand all the implications of the loan, before signing and returning the loan agreement documentation, along with a letter confirming you have taken independent legal advice.  

    Once we have received all of the documentation there is a 14-day statutory cooling off period during which you can change your mind about continuing with the loan. Thereafter your solicitor can make requests to draw funds from your loan with your approval.

    If you choose not to proceed with the loan after the cooling off period, you will be charged the administration fee of £500 or 1% of the facility, whichever is higher.

    At what stage can I apply for a loan?

    In the case of divorce, there must be an issued divorce petition as a minimum. After that, you can apply for a loan at any stage up to and including a final hearing. For other cases you can apply for a loan at any stage. 

    Can I apply for a loan if I am acting for myself?

    No. Your solicitor accepts obligations to Novitas, so you need to be represented to use our loan service. If you subsequently choose to act for yourself, you will be in breach of the loan agreement and will need to make repayment immediately. 

    Do I have to take independent legal advice?

    Yes. Once you have the agreement pack we ask you to take independent legal advice to ensure you understand the loan and the implications if you do not repay it. The solicitor giving this advice will provide a letter for Novitas confirming that you have been advised. You pay for this advice yourself; it cannot be paid from your Novitas loan.

    What credit checks do you do?

    We carry out ‘hard’ credit checks as part of the application. If you have a County Court Judgement (CCJ) or Individual Voluntary Agreement (IVA) to pay off an existing debt we may not be able to lend, but please consult your solicitor. 

    If you make the first drawdown more than two months after your Novitas loan is made live, or you later require a loan extension, we will carry out a further credit check.

    What do I have to sign?

    You will need to sign the following:

    • Pre-contract information sheet
    • Consumer Credit Act regulated loan agreement
    • Adequate Explanations document, which contains the information you need to be aware of when entering a finance agreement
    • Deed of Assignment over the proceeds of settlement so any lump sum payments are used to pay off the loan before the remainder is passed to you.

    You will also need to provide an authorisation letter permitting your solicitor to communicate with Novitas, and your letter of independent legal advice.  

    Do I need to provide security for the loan?

    You will need to sign a ‘Deed of Assignment’, which means Novitas is repaid from the proceeds of any settlement you receive before the remainder is passed to you.

    Novitas will determine how much to lend based on what your likely settlement will be and what assets there are in the matrimonial pot, which includes assets in your sole name, or held in your name jointly with another.

    In selected cases we may choose to lend where you do not hold any assets in your own name, but where there are assets in the matrimonial pot which are likely to form part of the settlement proceeds. You will need to pay an insurance premium which we have in place to cover the loan in the event that you are unable to repay the Novitas loan.

    The insurance premium is 10% plus Insurance Premium Tax of 1.2% (as at 3rd December 2017) of the amount that you drawdown and will be added to the loan.

    Please note that this insurance is to cover the loss to Novitas if you do not repay the loan. If you default on your loan, your debt will be passed to the insurer and they may then recover the outstanding debt from you.