Financial Arrangements

Hi,

I hope someone can help me wade through this financial mess.

Let me just summarise the situation.

My Wife recently told me that she wants a divorce. We have 2 children (6yrs and 11Mths). We have been together for 6 years and married for only 3.

Before we got married I had my own house worth (£65K) and fully mortgaged. When my wife moved in I paid her a monthly allowance for house keeping and paid all the bills and Mortgage (and still do). She has always worked PT and therefore never contributed to the bills etc.. (because of the Children to look after). 4 years ago we sold the house for a bigger one but currently have a high mortgage (185K - House worth app £220K). I've now moved out of the house (temporarly living with mum) and continue to pay the same as I did before. My wife only works PT and earns about £150 a month. I am currently paying £2180 a month for the Mortgage, Bills, House Keeping and Loan/CC payments. The Mortgage, loan and CC are all in my name only but debts are for joint ventures such as house improvements and holidays. My monthly earnings are £2900 Net leaving me with £720 a month to find somewhere else to live and pay bills etc.. oviously the maths doesn't work!!

The situation is completely amicable and we'd both like to keep it that way but we need to come up with a financial agreement that suits both of us.

I am aware that I should be paying 20% of my net income for child maintenance (£580 a month) but how much should I pay my wife as Spousal Maintenance?

This leads to a few other questions.

Does the fact that I had a house on my own before the relationship make a difference when looking at asset split?

If the debts are in my name only am I solely liable to pay them even if they were spent on joint expenses?

Do the payments I make for Mortg etc get taken into account when child maintenance is calculated?

Thanks for reading and I hope you can help.

In anticipation.

Kev

Hi Kev.

Well, first of all, you are right to want to settle this matter by negotiation if you can.

The first thing you have to remember is that the Court's primary consideration is the welfare of the children and their need for housing. Can I refer you to the FAQ section on this website. Click on FAQ, followed by Sorting out the Finances.

Given that you are trying to deal with the matter in an adult and sensible way, may I suggest your wife takes advice from a CAB on the issue of what benefits she could get. Is it possible for your wife to live in the family home with the children by a combination of her own income, child support, child benefit, spousal maintenance, possibly tax credits ? I don't know, but it costs nothing to find out.

It is very probable that, on the figures you have given, spousal maintenance would be awarded and the question is how much. But certainly not as much as £2180 per month even if this figure includes child maintenance. Don't forget, the Court has to consider you and your needs as well.

Do you have a pension ? That could come into it.

In answer to your queries : if the loan is in your name, and you signed for it, you are liable. The Court can re-allocate debts ; so if, for example, my wife and I have a car with a small loan agreement on it ( as we do ), and if my wife gets the car, a Court might say she pays the loan as well. But I signed the agreement and would remain liable to the Bank.

Does the fact that you bought the house affect the split ? Yes, in my view, but I'm afraid it's more likely to be relevant in considering what share of the equity you might get when the kids are 18. As I said, the needs of the children always come first .

Does paying the mortgage count towards child maintenance ? Well, obviously, if you pay the mortgage you are helping to support your wife and kids; but I think it's probably better just to fix the child support and spousal maintenance, pay that, whatever it is, and leave the mortgage to her. One important issue from your standpoint is that you really want to be released from liability for the mortgage.

I am sorry to have to say it, but on the basis of what you say I think you would be well advised to get some preliminary legal advice from a solicitor specialising in family law. I think it is well worth spending £300 or so plus VAT to get advice on your position - and I wouldn't negotiate before you have had that advice. Frankly, I think it could be false economy on your part not to do so. And I do think it is definitely worth your while to get advice about the benefits which your wife could expect as a single person and how child/spousal maintenance affects this.
Mike