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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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How does this work exactly.

  • SciFi
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29 Feb 08 #15386 by SciFi
Topic started by SciFi
Hi all, first post. First time a first post has felt crap to me but hey life is all experience!!

Anyway, I find myself seriously thinking about leaving. There is no one big thing here just 7 years of crap that I have just had enough of.

So, the question is...If I was to, with the exception of personal stuff, just walk and leave everything what happens with the house long term? There is no way that my other half could pay for the mortgage solo let alone all the rest of the elec, gas, phone etc etc etc

So what do I do? Just shut my mouth and live with my errors, leave and live in a box room because I am still paying for everything in the FMH.

There are a few things that I can work out like mobile that I provide and the car I lease for her as she can either take them or I cancel them, but it's the big M that I just can't get my head around


I crave your advice.

Thanks

SciFi

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29 Feb 08 #15412 by LittleMrMike
Reply from LittleMrMike
Unfortunately it is not possible to answer your query without a lot more information.

For starters :
1. How long have you been married ;
2. Do you have any children, and if so, their age(s\
3. Whether the house is in joint names ;
4. Its approximate value and the approximate mortgage debt.
5. Other assets like savings, insurance policies, investments, etc.
6. Do you have any pension rights ? Does your wife have any?
7. Your respective earnings.

If you can give me this information I could hopefully offer you some ideas.

Mike

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01 Mar 08 #15437 by SciFi
Reply from SciFi
mike100468 wrote:

1. How long have you been married ;

7years

2. Do you have any children, and if so, their age(s\

1, 5 years (I have 11 year old from prev with £325 CSA)

3. Whether the house is in joint names ;

Joint

4. Its approximate value and the approximate mortgage debt.

210k value 30k equity in

5. Other assets like savings, insurance policies, investments, etc.

None, even cars are leased
Life insurance, but not joint

6. Do you have any pension rights ? Does your wife have any?

I have a pension but only started in just under a year ago.

7. Your respective earnings.

Me: 45k Basic
Her: shift work so varies ~500pcm


Thanks

SciFi

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01 Mar 08 #15446 by attilladahun
Reply from attilladahun
Case Summary: Sci Fi at 1.3.2008

Age
H
W
Both healthy?

Length of marriage?
Length of per-marital co-habitation

Children
Age 5
Child –Age 11-from previous marriage [£325 CSA]
Both healthy?

[First assume the worst that the marriage is at an end and work out what as an absent parent your combined CSA would be]

Incomes

[This is clearly going to be a “needs case” considering the factors set out in s 25 MCA 1925 with child being priority need]

H-Job-£45,000 basic- Gross or Net? Give Gross/Net pa/Net per moth/Gross per week
H-£ average O/T & bonus last year
H-£ Benefits in kind/perks

W-Job-£ / £6,000 /£500/
W-CB £ /£ /£114
W-CTC£ /£ /£
W-WTC£ /£ /£
W-CSA£ /£ /£
I suspect c £1,200 net a month

Any serious argument likely to be raised re her earning capacity-it probably doesn't matter if she works 16 hours though? Can she get a better paid job and work longer if needed?

HOUSING

FMH £210,000
Mortgage £180,000
Less Costs of sale say 2% £4,200

Real Equity £35,800

Jointly owned

[Check the HM Land Registry –it is probably held as Joint Tenants which means if either spouse dies the party surviving get the house which is probably fine in this case as you have a child by that party

N.B. is there an endowment or “term” policy that pays off the mortgage if either dies? Yes a term policy but only on H's life -slight risk therefore if W dies.
If not this should always be considered as cheap as chips-clearly financial considerations apply!

The alternative method of holding a joint property is as Tenants in Common. This means each party has a specified and defined share e.g. 50/50%; 75/25% etc
If not defined 50% is presumed. On death the share passes to whoever the will provides or if no will as per the intestacy rules –if married and children 1st £125,000 to spouse rest to children 50% of capital now 50% of income for life then capital on death-
If no children all to Spouse

BUT NB

If divorce has been granted ex spouse automatically gets nothing even if will left unless the will specifically mention the gift to the ex spouse is to happen despite the divorce-s18A Wills Act 1867 assumes a divorced spouse is presumed dead!

So if held as Tenants in Common and one is nearly divorced sort out finances before divorce which is especially important if there are good pensions as the surviving spouse has rights as a spouse which go on divorce!
Also if divorce and finances not settled the surviving spouse may be forced to waste loads of costs suing the estate of the deceased spouse for a settlement under the Inheritance (Provision for Families and Dependants) Act 1973 s 2. This would be sad as there would be other claimants i.e. children from this and other marriage.

HOUSING NEED

W is priority need if C is living there

So we need to know that is there a realistic way for both parties to obtain housing that meets there needs
W for housing the child and
H for having visiting contact to that and the 11 year old child if necessary-
What sex are the two C for housing purposes?

H housing need will be given slightly less priority. We need to see whether this is a case where the FMH would have to be sold. It looks like it as the equity is low and Sci Fi says W cannot likely afford it but with Tax Credits and CSA she will probably have £1,200 per month I suspect to live on.
If the answer is the FMH has to be sold we need to ascertain:

W’s mortgage ability

What can be raised –any adverse credit etc.
So if say a House can be bought for £120,000 so to get in cost of moving/fees/furnishing it costs say £130,000

Need would be:
Deposit £35,800-£12,000 deposit for H = £23,800
So W would need £97,200 mortgage.

She would have to go to a specialist mortgage broker to place in the market and they would probably want evidence of tax credits and a agreement to pay the CSA payments you are to make. If the W cannot raise the mortgage and is in essence £12,000 short the Court will likely give her all the equity.

If a 25 year Mortgage at say 5.6% cost per month:
£455.00 [£536.25] on interest only and
£604.57 [£664.43] Capital repayment
What if interest rates rise 1% -FIGURES IN [ ]

H’s mortgage ability –NEED £108,000 assumes H gets £12,000 deposit and buys for £120,000-but no allowance for refurnishing/removal/costs!
what can be raised –any adverse credit etc

If a 25 year Mortgage at say 5.6% cost per month:
£504.00 [£594.25] on interest only and
£669.68 [£735.99] Capital repayment
What if interest rates rise 1% -FIGURES IN [ ]

On the face of it his position is better as he will have a greater income but in reality as he is to pay for 2 children I suspect after CSA payments the “net spending” after that with H & W will not be dramatically different.

Now this week many lenders are pulling in their lending criteria [Times 29.2.2008-stating they will often now insist that parties will have to provide 10% deposits to buy. This will affect possibly the approach the Court will have so even H will get some cash for a deposit even in a case like this where the equity is modest.

So what is the cost of “reasonable” accommodation for?
W
H

[So all in all decide if buying houses for you both is a viable option –if so there may have to be some serious “cloth cutting”
If you can show W can get a home the FMH should be sold so both can be re-housed. If not it may still be prudent to sell FMH so mortgage costs are reduced.

Other Assets-No
Life insurance –term assurance but not joint- so likely just covers if H dies.

Pensions
Not significant

I suggest you respond with any missing details especially the area in the UK you and she are expecting to live so the housing market can be “tested”.

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01 Mar 08 #15447 by SciFi
Reply from SciFi
Wow, I consider myself quite an intelligent person but that just totally over my head!

Look, I know that this is going to be hideously complicated in the long run but all I want to know right now, in a nutshell is if I just walk away and don't want to fight over who owes who £2.50 what are the options on the house.

1. I have to pay for it forever as I am the evil man leaving the house

2. The sale will be forced with any profit going to W (fine by me tbh just want to be happy)

3. There is some funky thing with benefits etc that makes 1 a shared cost. Eg what the point in kicking her out of a house into a council house when she has a good one right now...


Thanks


SciFi

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