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What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

What steps can we take to reach a fair agreement?

The four basic steps to reaching an agreement on divorce finances are: disclosure, getting advice, negotiating and implementing a Consent Order.

What is a Consent Order and why do we need one?

A Consent Order is a legally binding document that finalises a divorcing couple's agreement on property, pensions and other assets.


Do you need help sorting out a fair financial settlement?

Our consultant service offers expert advice and support to help you reach agreement on a fair financial settlement quickly, and for less than a quarter of the cost of using a traditional high street solicitor.


Advice needed - fair financial settlement

  • DGD
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26 Aug 12 #352033 by DGD
Topic started by DGD
Despite of hours of reading, I am in need of help. I would really appreciate some advice as to what financial settlement would be fair in our circumstances.

I am the wife in this scenario.

Cohabited before marriage for 4.5 years, married for 6 years - 10.5 years in total.

Wife aged 35, husband aged 41.
One child - 4 year old daughter who lives with mother.

Assets:
Jointly owned MH with equity of £17,000 (very rough figure as estate agents'' suggested prices ranged widely).
Car worth £2,500-3,000.
Savings £3,000.

Incomes:
Before the child was born, wife contributed equally towards the family budget and substantial initial deposit on the purchase of the MH. When the daughter was born she gave up her career to look after the home and the child.
Since then the husband has been the main breadwinner and mortgage payer. His net annual income last year was £40,400.
The only wife''s income at the moment is Child Benefit of £81 a month. She has applied for Income Support, so in the future her income might consist of Income Support, Child Tax Credit and Child Benefit. She intends to start looking for a job in the near future.

6 months ago the wife and daughter moved out of MH and came back a month ago when the husband moved out of MH. So we have lived apart/ been separated for the last 6 months.
During that time (whilst being the sole occupier of MH) the husband has continued to pay most of the mortgage and utility bills, however, he has not provided any money to his daughter and wife in the form of their maintenance. Instead, all the income left over after paying the house bills he spent on himself, his holiday abroad etc (£12,000 in 6 months).
He approached me recently to tell me his current account is in overdraft, he is not earning money any more, hence he can no longer pay the mortgage etc and that he wants £3,000 from my savings account (mentioned above).

My questions would be:
- Could my husband''s behaviour be viewed as reckless in the responsibilities assumed since our separation? I mean it is pretty obvious his intention has been to dissipate assets. The reason I still have £3,000 in my savings account is because my family helped me and I and my daughter have led a very modest lifestyle for the past 6 months. I can not afford to give the savings to my husband now as I will have to use it to pay the mortgage and the bills on the MH.
My husband intends to keep the car.
Would it be at all reasonable and fair to argue that, since he keeps the car and has been reckless since separation providing no child maintenance for the past 6 months, he transfers his share in the MH to me & child?

- Can I expect to stay in the MH with my daughter? It is a 3 bed house, so it is a bit too big for us two, but I could let a room. Besides, I just do not seem to be able to think of a better solution. By no means downsizing is a cost effective option in our circumstances. How the situation of this kind would be viewed by court?

- Can I expect any SM? What amount and for what term would be reasonable, if any? (I guess I would need it if I expect to pay the mortgage on the MH).

- I applied for child maintenance through CSA. I guess it will take a while but, most importantly, my husband insists he has got no stable income anymore. Apparently, he changed jobs a month ago and now he is being classed as self employed. He is still getting subcontractor invoices to prove his income but he argues his income will vary a lot from week to week and it will be considerably less than it used to be.

- What would be the best course of action? We have had one mediation session that I was not at all impressed by. I did tell the Mediator that at the moment I am mostly concerned with finding some short term financial solution (in the form of MPS and child maintenance) but she just ignored this and all we managed to agree on in the first meeting was the date for the second one! I am left for still another month to cope with no financial support from my husband whereas he seems to be adding on to his overdraft.
Can anyone advise me as to what can be expected from mediation? Is this heel dragging approach usual? I mean the money we spend on Mediation has got to be proportionate to the amount of money involved, which is really small in our case.
I would like to come up with a financial settlement proposal for my husband to speed up the process. Ideally, we will be able to come to an agreement before our second mediation session and have it drafted into a Consent Order.
What should I do if we don''t? Should I just carry on with mediation or is it better to submit Form A to the court requesting MPS?

  • LittleMrMike
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28 Aug 12 #352259 by LittleMrMike
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I see you have not had a reply. But reading through what you say, there is one point that shrieks at me.
You say he earned £40Knet last year but '' he is not earning money any more ''.
What does that mean ? Has he been made redundant ? Or have his earnings reduced ?
You have to agree, this matters. Unfortunately, it is not at all uncommon, for husbands facing divorce, to reduce their earnings deliberately to limit their exposure to child and spousal support.
Before you even go into mediation, you must surely have a mutual disclosure of finances ? How can anyone mediate without this information ?
LMM

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28 Aug 12 #352340 by DGD
Reply from DGD
LittleMrMike, thank you for your reply.

These are the facts:
My stbx has resigned from his job two months ago. Since then he has worked in construction as self-employed. Based on the invoices (they look pretty much like payslips but I guess they are called invoices), his average net income for the first 5 weeks was £750. Then he had a long holiday abroad. And on the first week after holiday he was paid £230.

Now this is what my stbx says: I have changed jobs and I will not be earning as much as I had been; you can''t rely on my past income to predict my future earnings as every week will be different since I am self-employed.

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29 Aug 12 #352723 by DGD
Reply from DGD
Any advice anyone?

Should I just apply for AR? Or do I have to wait for mediation outcome first?..

  • Action
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29 Aug 12 #352733 by Action
Reply from Action
My husband pulled that stunt on me. ''Changed direction'' of his business in order to reduce his income significantly. So successful that he ended up on benefits as a result. He had been earning around £50k a year and that was with some very creative accounting.

Our Mediator said that a judge would see through it, and that it is commonly called ''disappearing income symdrome''. I would say to see how you get on at the next mediation session but make your thoughts clear to the mediator and your ex. Every session should really start with the mediator agreeing with you what you want to achieve.

I had to end up with a compromise settlement out of court in the end as I was so worried how far my ex would go in reducing his income and spending such a lot of money on holidays and luxuries etc.

Needless to say, he''s now reversed his ''change in direction'' and is living alone in a 4 bedroomed period house at £1200pcm rent!

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30 Aug 12 #352751 by LittleMrMike
Reply from LittleMrMike
I think I''d concur with what action says, it is not by any means unknown for husbands facing the possibility of sm to reduce their earnings to limit their maintenance liability.

A Court must look on earnings potential and not just actual earnings. We have had at least one poster, I shan''t name names, who changed his employment for reasons which were much more understanble, and the judge was having none of it and refused a variation.

LMM

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30 Aug 12 #352912 by DGD
Reply from DGD
Thank you, Action and LittleMrMike, your advice is really helpful.
It''s good to know courts can see through it. I will definitely mention disappearing income syndrome in our next mediation session, if needed.

What I need to get ready for our next meeting with mediator are my suggestions for the financial settlement. I still do not know though what to suggest.

Can anyone offer guidance, ­base­d on your knowledge and experience, as to what financial settlement might be reasonable and fair in our circumstances?

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