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How will my Financial Order be affected in light of coronavirus?
- AuthorSam Miles
If your divorce has recently been finalised and as a result you are either reliant on or are obliged to adhere to a Financial Order, we understand that you may have questions due to the uncertainty now created by the coronavirus pandemic. Sam Miles, Family Law Partner, here explains what steps you can take if you or your former spouse can no longer meet the requirements set out in the Order and whether any variations can be made.
When does a Financial Order take effect?
We would always advise couples who are divorcing to consider a Financial Order, even if there are no assets or they are in sole names. This “clean break” order can be used to minimise the risk of a claim being brought against either party in the future. No Court Order can be made until the decree nisi of divorce has been pronounced, and the Order will come into full force and effect once the decree absolute has been made.
There are currently no restrictions on divorce applications being processed, even though there may be a slight delay, so when your decree absolute comes through the Financial Order will take effect.
If you haven’t yet submitted your Order to Court for approval you can still do so, but there may be a delay whilst the Court processes it during the current Covid-19 crisis. If you cannot agree on the terms of a Financial Order there are options available to help, such as Family Mediation.
Can a Financial Order be varied?
A Financial Order can deal with various arrangements such as:
- Lump Sum payments
- Spousal maintenance payments
- Child maintenance payments (by agreement, otherwise the CMS has jurisdiction)
- Pension Sharing Orders
- Sale or transfer of property
There is no doubt that the coronavirus pandemic is having a significant impact on business, with many people either being furloughed, i.e. being temporarily laid off with 80% of their salary supplied by the Government, being made redundant, businesses closing or those who are self-employed moving over to Universal Credit. This would clearly have a detrimental effect on a person’s ability to make the payments specified in the Order, or will increase their reliance on receiving that payment. It may also be hindering the sale of a property, or have had an impact on the size of a pension which is due to be shared.
Court Orders can generally only be amended in very limited circumstances, and only certain types of Order can be varied. You will need to take specific legal advice on your own particular circumstances if the Order you have no longer meets your needs and you wish to try to alter it.
If you are struggling with payments, or you are concerned you will struggle in the future, we would recommend you contact your former partner and discuss the situation with them in the first instance. We appreciate this may be a difficult conversation if you had a hostile separation, however it is likely that they will also be sharing your concerns and opening the lines of communication as early as possible can help reduce stress levels and may overcome long term complications.
Where a compromise cannot be reached between the two of you, we would advise that you formally write to your former partner detailing the financial impact the coronavirus pandemic is having on your income, requesting a suspension or reduction to the payments. If you are able to include evidence within your correspondence, for example, a letter from your employer detailing the terms of your redundancy or furloughing, then this would be advisable.
If you receive such a letter from your former spouse, depending on the evidence produced, you may wish to consider it carefully. It may be that you can apply for additional state benefit payments during this time to make up the shortfall, or you can discuss with your landlord or mortgage provider to access the mortgage “holiday” on offer. Bear in mind that any disagreements here could have a longer lasting impact than the short term reduction in payments.
If this still leads to no resolution, then an application could be made to the Courts, however, as discussed above, it would be likely that this would be delayed. If it is Child Maintenance Payments that you are struggling with, the Child Maintenance Service may be able to recalculate maintenance obligations where there has a change in income of 25% or more. It is likely you will also experience a delay here due to the number of enquiries they are receiving.
Orders regarding property sale or transfer cannot be varied (except in very limited circumstances) but timescales can possibly be adjusted, for example the sale of a property must still proceed but at an optimum time for both parties. In light of the current restrictions on the property market, it is unlikely that your property will complete in the near future and so some flexibility must be given here.
We understand that the coming weeks and months will be ones of uncertainty and financial disruption, and we are on hand to discuss those concerns with you. While our offices are not open for face to face appointments, our teams are working remotely and can communicate with you in a method of your choosing, for example telephone, email or video conferencing, at a time convenient to you. To discuss your situation with Sam or a member of the Family team, you can call us today on 023 8071 7431 or email firstname.lastname@example.org.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.