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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.


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Final Hearing

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05 Mar 18 #500033 by iainwest78
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Going into a final hearing regarding the financial hearing this week. Brief background, was married for 12 years, have two children, now 14 and 12 been separated for 2 years and am currently carrying the credit card debt, around £33k which was obtained during the marriage, where the finances were controlled by the ex. I now have no funds left to pay barrister/solicitors fees and will then be representing myself in court this week. The children's matters have been resolved around contact and I have the calculations from the CMS on what I am expected to pay. Issue I currently face is around the Ex not opening to any negotiation and sticking to her guns that she wants to keep the house until the youngest is 21 or completes tertiary education!

When we went to a FDR last November the Judge did say that he would only look at keeping the house until youngest is 18 or completes secondary eduction and regarding to the maintenance I should be paying he felt this should be in circa of £1000 per month.

I was in permanent employment until last June and earning £57k per year, the company I worked for looked to transfer my employment to a different company under the rules of TUPE, I didn't accept this offer and chose to take up a contract position with a competitor only until June 2018. Although I am now contracting I am paying myself a salary of £57k per year to keep my wage aligned to what it was previously and to ensure I can take holidays and have a buffer in place when I am between employment.

My ex earns £35k per year, has always worked, has a degree and professional qualifications in the industry she works and could earn more if she chose to. On the other-hand I don't have a degree and have been on the same salary for the past 10 years, so theoretically have reached my earning capacity.

I have been trying to negotiate since the FDR last November and all options I have put forward have been rejected, I have now and received this from ex's solicitor. "Our client has instructed us not to enter into further negotiations in advance of the hearing. She has made an open proposal in her s25 Statement which you have rejected. She is therefore content to leave it in the hands of the Court."

Her proposal is and always has been, she wants the house until the youngest is 21, for me to pay 1200 per month in spousal maintenance in addition to child maintenance which i have had calculated at £139 per week and she has at £184 per week.

I am cohabiting with a new partner and she has two children both live with her all the time and am contributing 50% in the living costs her, this has reduced my living costs when I was living alone in accommodation which the ex viewed as unsuitable for two children.

Can I use the above response from the ex's solicitor in my evidence when I go back to court about the obstructive behavior with regards to the negotiations?

Would I be expected to pay spousal support or that much?

Can they force me to take additional money out of the company, which in turn means I wont have a buffer when between employment and wont be able to take holiday?

Looking at the schedule of outgoings from my ex she seems to need around £4k per month net to live on and I am expected to live on less than £1k a month!

  • wheatnotthechaff
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05 Mar 18 #500045 by wheatnotthechaff
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Hello

My advice would be for you to keep focus.
It's hard to give any extensive 'feedback' (I won't call it 'advice' as I'm not a lawyer, and I'm familiar only with my own case) because your post doesn't contain enough information. But hopefully I can give food for thought regarding the points you've raised.

1. Credit card debt of £33k. In principle, this is a marital liability and your ex-wife needs to effectively give you half towards settling it, i.e. £16.5K. However, all assets and liabilities need to be taken in to account before a net position can be determined, of course.

2. You're paying yourself a salary of £57K - do you really need to? The more salary you pay yourself, the more PAYE income tax and NI you're shovelling to the tax man. If you're operating via a limited liability company then paying yourself mainly in dividends and a minimum amount in salary will be far more tax efficient.

3. What you're describing as regards the former marital home is a Mesher order. If the FDR judge assessed that it's appropriate then you may wish to consider that the judge at Final Hearing (who will be a different judge) will also order this. Presumably, then, there isn't enough assets and mortgage capacity to go around to house both you and your ex-wife & kids adequately. Priority will be placed on the kids' needs, obviously. Stick to your guns re the Mesher order being effectively only until the youngest reaches the age of 18.

4. Maintenance. The £1000 per month alluded to by the FDR judge - is this the total of spousal maintenance plus child maintenance? If so, you need to strongly challenge the £1200 per month spousal maintenance alone wanted by your ex-wife. Presumably her apparent need for £1200 per month spousal maintenance is based on her form E needs of £4000 per month. Perhaps the needs figure of £48,000 per year is litigation-driven...? If so, tell that to the judge. You have to go through each and every item and assess its validity. Also, gather as much evidence as you can as to your ex-wife's true earning capacity but please be realistic - if she's been earning £35K per year or thereabouts for a number of years then why expect her to suddenly be able to up it significantly? Give her a little credit for actually working.

5. Forget about mentioning your new partner or what effects that has had or will have on your finances. The judge will not give a hoot.

6. Forget about complaining to the judge about your ex-wife's lack of negotiation unless you too have made an offer to which she has not responded. It's her right to leave it in the hands of the court, no point banging your head against a brick wall on this one.

Keep focus and I hope you get a judge that recognises that your ex-wife is not totally helpless. Yes, her needs ought to be met in particular as they relate to the children but she can't expect to have the life she had before divorce at the expense of you being destitute. Good luck.

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05 Mar 18 #500052 by divorced at last
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I agree with the advice from wheatnotthechaff, keep focused and always have a plan b if things don’t go in your favour.

It sounds like it will go down the Mesher order route, definitely stick to end of secondary education, that is more than ample. Also on her salary, plus your spousal and child maintenance her mortgage capacity should be pretty good so she should be able to release your from the joint mortgage.ensure a time frame for her to do this is made.

Bringing your new partner in to it will only highlight that you have a roof above of your head, for which you share costs 50/50 with your new partner, whilst your ex is still (presumably) living on her own. Your new partner’s children are not your responsibility. And the Judge won’t be interested.

Spousal maintenance seems to be certain, make sure it will end on your ex wife’s cohabitation of a period of six months. It will automatically end if she remarries. Try and minimise the period you pay it for. Possibly even offer £800 for two/three years?

Ensure the debt is split 50/50, if you are due to support you ex wife, she is to keep the house for the foreseeable then it should only be fair to split that. Being credit card debt would it be reasonable for you to look at getting a loan for a set period to clear it? From experience keeping joint debt (aside from a mortgage) is risky and causes problems. You should be pushing for that debt to be paid jointly and as soon as possible.

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06 Mar 18 #500064 by iainwest78
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Thanks wheatnotthechaff for your post it certainly has given plenty of food for thought.

1. The only asset is the house, the liabilities are very high and my ex has managed to rack up more debt since the separation. She seems to think I should pay for the whole matrimonial debt and pay towards her own debt. A split of 50/50 matrimonial debt seems a far split.

2. I will check with my accountant on the setup and will look to change this next tax year when this is done and dusted. My solicitor did say that if I pay myself a low wage they will put in place an inferred income of what I am expected to earn based on my past earnings. As long as the court can't demand I draw more money out of the company as this will remove any buffer I build up when between contracts.

3. Understand the priority on housing the kids and that is what I want to ensure, take your comments in point 5 but would the court expect me to house my ex and the kids then be dependent upon my new partner to support me with my housing needs?

4. He didn't alluded to £1000 being maintenance in total, it was more should be expected to pay £1000 per month in maintenance, open offer in S25 has come through referring to £1200 global maintenance until the children are 21.

Her salary at £35k per year she is less then she was about 8 years ago, she is now doing a job in pension admin, where before she was a technical pension adviser and is chartered in her field. She has always worked and it was me who took the time out 10 years ago to stay at home and look after the children before they started school.

I have gone through her form E again and her needed income has gone up £1400, this includes her need for a cleaner, gardner, private medical for the children, her credit card debt along with loan she has taken out since the separation and her loan to her brother.

Issue is not with me paying to support her with the children until they are 18 it is more to do with clearing the debt and being able to live and move on, in her open offer she doesn't want a Clean Break as she says will not be able to adjust without undue hardship. But at the same time she doesn't want to be financially linked to me as she doesn't trust that I will continue to gain employment now I am a contractor.

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06 Mar 18 #500066 by wheatnotthechaff
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Hello iainwest78

1. In England, the assets and liabilities to be considered are those as at the time of the hearing. So, it might well be that case that she has racked up debt since separation but all of it still goes 'in the pot' for allocation. Not the news you wanted to hear I guess, sorry. You'll need to show that she has been very profligate since separation if you want to exclude the increase in debt she has built up.

2. Your income = salary + dividends you draw from your company. Keep the former low and the latter high, but to be honest that's a tax issue and not really that important as regards the financial settlement. If you want to keep your income at 57K, fine. All I'm saying is that you may wish to consider it to be 9K salary + 48K dividends.

3. The court will expect your ex-wife to house your kids, not you. But if she needs help from you then you'll need to contribute if you can. As mentioned previously, and reaffirmed by Divorced at Last - your dependence on your partner, whether forced by the situation or not, will not be considered by the court. Best leave that argument alone. There's no hard and fast rule except that your minors' needs come first.

4. OK, seems you have a case for arguing that £35K is not her proper earning capacity - make the most of it. A 12 year marriage may not be considered to be a very long one (subjective, of course) so you may have an argument for a non-extendable maintenance period, say 2 - 3 years because by the end of it she could get better paid employment. I think Divorced at Last is on the money there. Argue that the court order should not stipulate child maintenance beyond the youngest's 18th birthday.
Are you able to go through her form E needs and, for every item listed, arrive at figures that you think are correct? Are her needs really anywhere near 48k per year? Did you, when a family, have a gardner, cleaner or medical cover? If not, how is she entitled to it now? Is she saying she needs 48K per year for her and your kids to live off? If so, does that sound realistic or way more than her actual needs? What evidence is there of the monies loaned to her by her brother?

Wheatnotthechaff

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06 Mar 18 #500075 by divorced at last
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Just some quick pointers for you to think about at final hearing. The below are ACTUAL questions that my partner was asked at his final hearing by his ex wife’s barrister:

Don’t you think £10 per month is excessive for a hair cut each month?

You say you need £80 a month for petrol, we think you only need £60.
To which my partner pointed out that he could say he only needed £60 if they didn’t want him to work one week a month.

Why is your Sky bill £80 a month, that seems high, you could get a better deal than that
Even tho the ex wife pays £146!

Why do you need to rent somewhere with two parking spaces, you or your partner could park in the road. To which the Judge intervened and said they couldn’t stipulate where his new partner (me) should park their car!

Joint debt is joint debt, regardless of when it was run up. Had lots of bad experience in this, for my own divorce and my partner’s divorce. If it’s joint, you had access to it too and it could have also been frozen to prevent the debt when you separated (you learn your lesson on that when you get your fingers burnt). Plus the court will not have the time or patience to go through £33k worth of debt deciding who is responsible for each transaction.

Moving in with your new partner has halved your housing need. You aren’t duty bound to support her or her children nor is she to support you BUT your ex will argue that you are now cohabiting and therefore you are only responsible for half of that new household’s cost I.e. if the rent on your current home is £1000 that will be split 50/50. If the mortgage on the FMH is also £1000 you are saying your wife is responsible for that solely... The court will also take the view that you were fully aware of your financial commitment to your “first family” before you moved in with your new partner. Is it fair, no, is it the way it works, yes.

Get the non extendable term of two to three year spousal maintenance and try and push for Mesher order 50/50 split when youngest turns 18. She will have a good wage coming in with her salary and global maintenance will increase her mortgage capacity. She’s more than likely asking for £1200 with the hope of getting £1000.

My partner pays his ex wife £1000 global maintenance a month and earns 10k less a year than you, plus he’s been ordered to pay 50% of the kids school uniform, extra curricular activities and equipment, school trips IN ADDITION to the £1000 per month. And ex wife keeps the house til youngest is 18 then pays him out his 40% share.

Spousal maintenance is always the real bitter pill to swallow, sounds like your are going to be paying it, try and reduce that to the minimum amount of time you can.

Please do post and tell us how you got on. Good Luck!

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07 Mar 18 #500084 by iainwest78
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All done!

Pulled to pieces over being self employed and hiding money through not disclosing for financial details of the limited company I operate out of.

Well calculation by the judge was on p60 being employed in a permanent position and ordered to pay £1000 global maintenance until youngest is 18. Did want an additional contribution towards child costs at 50% payable in arrears based on receipts issued by the ex. Don’t trust the ex and I claimed her unreasonable spending and occurring debt since the separation can’t guarantee this will go towards the children as still leaves her short £1000 based on income needs.

Managed to get agreement that each quarter based on my income I would put 10% for each child into a junior ISA until the children are 18. At least the children will have something when they turn 18.

House will be sold when youngest is 18 60/40 split, unless one of the trigger points occurs in the meshed order and kept my pension which was £20k greater than ex.

Phew. Been a long day

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