Question on Financials / Asset Division

Hello there!!! This is my first post, and it is quite lengthy so please accept my do apologies in advance!!!

We are currently going through a divorce, after 7 years of marriage and one lovely 5 year old boy. My husband has been very difficult about the whole divorce, I believe he's in denial. There is no-one else involved but after lengthy consideration I realised I could not spend the rest of my life like this. I submitted the petition in February, he tore up the papers when he received them and ignored the next lot when the bailiff served him mid March. Anyway, I have now applied for Decree Nisi and have been told that the hearing should be this week or next week. So far so good, but the problems start when we talk financials. The situation is a bit complicated, so please bear with me.

When we first met I did not own a property, he owned a flat which he had bought for £80K in the late 1980s. He sold this property in the year we got married, 2000, for £239K and we bought another property (in joint names) for £250K. As pathetic as it sounds, I didn’t get involved in the paperwork but I believe the mortgage was for the full amount. He was then made redundant in November 2001 when I was pregnant. He stayed unemployed for 3 years. He still claims he was running his own business but this never seemed to generate any money, and all the meetings he was attending seemed to be in pubs…I went back to work full time in September 2002 when our son was 6 months old, something which I never really planned to do. In June 2003, we downsized (basically because we couldn’t afford to pay the mortgage). We sold the property for £365K, I signed a document to say I was happy for the £115K to go into his account. By this stage he had a bad credit record and so the mortgage on the new (smaller) house had to be in my name only. This house was worth £220K. We put down £60K (from the £115K in his account) as a deposit and the mortgage was for £160K. The remaining £55K went into his bank account and was used partly to clear some debts he had, buy a family car (for £14K) and to live on since he remained unemployed until December 2005. Up to December 2006, he was paying this mortgage, whereas I was paying the nursery fees for our son (ca. £600/month) plus a storage unit costing £180 / month and most of the food bills. It certainly felt as if I was “paying my way”. Since April 2006 I have been paying the council tax & water bills. Since December 2006, I have been paying everything else as well (mortgage, all utility & food bills and all expenses for our son. Our son started school in September so at least the childcare costs are considerably reduced. Now we are divorcing, he is saying that I owe him money. Well actually he is completely inconsistent, going from saying he wants a Clean Break and never to see me or my son again, to saying he wants £30K, to saying he is leaving the country, to saying he is buying a house around the corner….etc…) I would (obviously) like a clean break and am happy for him to see our son as much as he wants to. He is being difficult about this and I don’t think he understands what a clean break is. I have tentatively offered him £20K but the only way I can free up capital to pay him off is selling the house and downsizing again. I have had the house valued, the estate agents say it is worth £265K but I am not convinced it is worth that much. If it is worth £250K then there is £95K in equity tied up in the house. Currently my monthly expenditure on essentials is about the same as my income, so I would REALLY like to reduce the mortgage as well as paying him off but looking at property prices where we live I will be lucky to afford something suitable. Sorry for rambling but how can this be resolved in an INEXPENSIVE way? I cannot afford to pay a solicitor £20K as it will not be worth it for the sums of money involved. If the judge makes the final decision, then will he take into consideration what has happened in the past or would he just look at the current situation? And how do we get to that stage without involving solicitors? Oh also, my soon to be ex husband has a share in his new business worth £25K and a quarter of his father’s house in Suffolk l which must be worth at least £250K. I have NO assets!!!

Please help!

Congratulations for getting this far!!!

MISS JONES
xxx

Dear Miss Jones

Firstly, I am sorry to hear about your situation. You deserve better than this.

My first thought is, could you qualify for legal help ? I don't know, but this was my first thought - I reproduce the following from the CAB website called adviceguide.

What are the financial conditions for Legal Help

Legal Help if you're getting benefits

If you’re getting Income Support, income-based Jobseeker’s Allowance or the guarantee credit part of Pension Credit, you’ll automatically qualify for Legal Help. Also, you'll automatically qualify for Legal Help if you're an asylum seeker getting government asylum support. Otherwise you have to meet both income and capital conditions.

Legal Help if you have income

If your gross monthly income is over £2,435 you won't get Legal Help. 'Gross income' means before tax and national insurance are taken off and it excludes certain social security benefits. If you have more than four children, this limit goes up by £205 for the fifth and each additional child. You have to include your partner's income unless your partner is the person who you are in dispute with.

If your gross monthly income is £2,435 or less, your solicitor or adviser will then check out what is your disposable income. 'Disposable income' is the amount of income you have left after deductions have been made for national insurance, child support and tax. Also, if you have a partner who isn't earning or if you have children, a certain amount of your income won't be taken into account. If your partner is earning, their income will be taken into account, unless your partner is the person who you are in dispute with.

To qualify for Legal Help, your disposable monthly income can't be more than £672. If you are within this limit, you don't have to pay anything towards Legal Help.

Legal Help if you have capital

If you have disposable capital (savings) of over £8,000, you won't get Legal Help. Disposable capital includes:

* money in the bank
* valuable items
* the value of your home (if you own it). This depends on how much the property is worth and how much your mortgage is.

You have to include your partner's capital unless your partner is the person who you are in dispute with.

If you're getting Income Support, Income-based Jobseeker's Allowance or the guarantee credit part of Pension Credit, you'll automatically get Legal Help regardless of the value of your home or of any other capital you have.

More information about financial eligibility for Legal Help

If you want more information about whether you qualify for Legal Help, visit the Legal Services Commission website, where there is a leaflet called 'A practical guide to Community Legal Service funding by the Legal Services Commission'. The address is:- www.legalservices.gov.uk/public/help/leaflets.asp. There's also an online calculator which helps you work out if you can get Legal Help. Go to www.clsdirect.org.uk.

The second bit of ' safe ' advice I can give you is that it is always worth visiting a CAB and asking for a benefit check. That costs you nothing.

Next comes the issue of the house. As you have a dependent child, Courts will always give priority to the needs of the parent who looks after the child. In practice this means that you will have the right to live there as long as the child is still dependent, after which it may be sold, but there are a number of options open to a Court which I won't explain at this stage for fear of landing you with information overload.

Then there is the issue of child maintenance and the CSA. I confess I'm not much of an expert on this. The CSA website is a start but I don't think all that much of it.
In fact I don't think much of the CSA as an institution !

I would honestly like to have a Big Think about your case as it is obviously complicated. There are quite a few very experienced people who contribute regularly to this site and who, though not necessarily legally qualified, do know a fair bit about it. I'd be interested to hear what they think.

I may come back when my head has cleared !

With every good wish

Mike

One useful bit of advice I was given by a solicitor very early on is that a decent solicitor should tell you what the likely costs are (it may be within a big range). I don't know how this will pan out as I'm still in the middle of the process, but there's nothing to stop you asking solicitors about this. My contract with my solicitor includes a written estimate.

I have to say I find the legal bills all very scary but I think I do better by being represented. I also asked around to find out who was a good solicitor. I didn't want someone who would express sympathy but someone who would tell me my position clearly and act efficiently on my behalf. As I'm busy with work and children I feel happier passing some of the work and worry to someone else. But I know other people who reckon it's been better to work through the system on their own.

If you do go to a solicitor, it helps to know exactly what you want at the end of the process. You will be paying for the solicitor's time so you need to use it efficiently.

These are only my thoughts from my current experience and it's not over yet, so listen to what other people say as well.

Good luck!

Mike,
Thank you for your reply. I am actually pleased to hear someone agreeing with me that is a complicated case.
Unfortunately (!) I earn too much money to qualify for legal aid. My total income (including variable bonus) is around £35K. I have never earned so much money in my life but never had so little disposable income! My average net pay works out at about £1900, my bonus is paid quarterly, so every 3 months I get a larger pay cheque. Current expenditure on essentials alone (mortgage, service charge, council tax, utilities, childcare, food bills, car costs) are about £1800. I have recently applied for Child Tax Credit as a single person as I have been living as a single parent since Jan 2007, and have been told I may be eligible for approx. £10/week. I am just concerned as my stbxh is using the argument that he hasn't got any money either, and if he needs to set up a new house, he needs capital to do so. I know as well he will be difficult about maintenance for our son and was even thinking about suggesting that we have a complete clean break, he leaves me with the equity in the house but doesn't owe me anything for our son...? In that way I can sell, free up some capital, downsize and have a break from the financial worry! The added complication is that he is still in the house. Actually it is a lot more complicated than that... but suffice to say he made a promise (in court) to be out by end of June. (This is where the buying a house around the corner comes in, he was due to exchange contracts a few weeks ago and this still has not happened...) I want to be fair to him but at the same time, I need to think about my son. Ooooh, sorry, here I go again off on a tangent... Please please do have a BIG THINK about my case, I would be really interested to hear what you think.
Many thanks!
Best wishes
Miss Jones

Dear Athene,

Thanks for your reply. I know what you mean about handing over to someone else while you deal with work & children. But only if you feel confident that the solicitor is doing the best for you.

I didn't actually use a solicitor for my divorce petition. I had a one hour consultation and then did the paperwork myself, although my solicitor kindly checked it for me free of charge.

However, because of his reaction when he I told him I had applied for the divorce (& previous "incidents" all of which had been documented) I applied for an Injunction. (Non-molestation Order & Occupation order.) I engaged the solicitor to act for me in this matter, in particular to represent me during the inter parte hearing. Upshot of the hearing was: the non molestation order is still in effect but the occupation order has been put on hold as he agreed to leave the house by the end of June. Well actually, he agreed to leave by mid April or another date to be agreed by both parties, this date has now become the end of June. As you can imagine, still having him in he house is extremely stressful, although he is out almost every night and spends most of the weekend in the pub. In total I have paid quite a lot of money to my solicitor and to be honest, I don't feel I have achieved that much. I have got a written "indication of costs" which is as follows:

i) If your case can be resolved by agreement without the need for court proceedings then, depending upon the amount of negotiation and preparation involved, and the stage at which agreement is reached, your costs could be between £2,000 and £5,000.

ii) If the case is resolved by agreement during the course of court proceedings, the costs are almost certain to be higher and will depend upon the stage of the proceedings at which agreement is reached. If, at the latter stages, then your costs could well be as high as the larger figure in iii) below.

iii) If proceedings are necessary and your case is resolved through the court with the court imposing a decision upon you then, depending on the length of the hearing and the number of hearings, your costs could be between £5,000 and £20,000.

With my stbxh being so inconsistent, it is hard to judge which of these is likely to happen. He was intially keen to go to mediation, until he realised we need to make a disclosure of any court orders, then he changed his mind. He knows that it will cost a fortune to go to court and he says I will have to pay all fees as he "doesn't have the money".

Sorry for the essay. Thanks again for taking the time to read through non only the initial post but also this one. I sometimes feel like I cannot think straight as life still has to go on despite these dreadful circumstances, work, the school run etc. What stage are you at in the process, is there light at the end of the tunnel? Any tips on how to cope? I feel this has gone on long enough!!!

Best wishes

Miss Jones

Miss Jones

I know it is obvious. But the less you both spend on lawyers, the more there is for you.

Looking at the house, there could be two ways of dealing with it. . One is to sell it now, and you buy a smaller house, with a smaller and more manageable mortgage, and pay your husband off. The second is to ask the Court to allow you to stay in your present house for as long as your son is a minor. Then the probability is that it would be sold and the proceeds divided. I am assuming you know what a clean break is.

Leaving the house aside for the moment, let us have a look at maintenance . You obviously have a good income. You don't tell me what your husband gets, and I suspect the reason is that you don't know. He may well be getting more than he cares to admit. He should, I reckon, be paying you 15% of his net income towards the child's maintenance. But not all fathers pay child maintenance, as you know. The CSA bluster about this but as far as I can see, they aren't too good in enforcing payment. By the way, and as an aside, one can't get a clean break from liability for child maintenance.

It could theoretically be possible for either of you to have to pay spousal maintenance to the other, if there was a significant disparity in your respective earnings. But it looks to me that your husband has the ability to earn a decent salary ; he has worked in the past and you may have a general idea of how much he gets. If you care to send me a private message I may be able to comment further.

The difficulty I find here is that your husband strikes me as unstable, not very reliable, the sort of person who would probably conceal assets, lie about his means, be quite happy to shift his responsibility towards his child on to you and/or the taxpayer, and behave in a generally unco-operative manner. Is this is a fair assumption on my part ? My fear is that, when one ( or both ) of the parties is playing silly beggars, the costs can start ratcheting up at a serious rate of knots. Even if you get an order for costs in your favour, can you be sure they would be paid ?

You could, in theory at least, claim that you could have a share in the business. I am no expert on businesses ( well, I'm no expert at divorce, for that matter ) but the difficulty is that selling the business kills the goose that laid the golden eggs, because it destroys your husband's income. There seems to be some concern in the business world about entrepreneurs whose wives divorce them and get a huge award and they have to raise the cash somehow, but that can have a serious effect on the viability of the business. That is for better brains than mine, but I just have this feeling that this case could turn nasty, and that costs could start escalating out of control. As regards this property in Suffolk - you could make a claim against it but perhaps you could trade it off for a higher share of the house.

I have to keep reminding myself that this is not an examination question. This is a real issue involving three people - your husband, you, and your son. I can't answer this question for you - you know your husband, I don't. I'm afraid I can't decide this for you.. Did your solicitor give you any pointers as to the likely outcome if you went to Court ? And more importantly, how much would it cost to get it ? I do advise that, before acting on the advice in this or any other post, you should seek the opinion of someone professionally qualified to give the advice. In any event, we only have one half of the story.

Mike

Dear Miss Jones,

Like many people on this site I'm between nisi and absolute, waiting for full financial disclosure (and trying to find time to chase up bank statements, etc.) The good thing is that life has got better, although I wish it were all over. I still have to live with the uncertainty about whether I'll end up with somewhere to live.

On the important side, I think things are easier with the children now and they're settling down. The period before we split was hard for them and it was appalling when it all happened. But they've still got two parents and are coping well now. Of course, we all have days when we get upset, angry and so on.

As for light at the end of the tunnel, I'm not sure - but there are some very good moments on the way.

best wishes

Athene