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Will my financial settlement be affected by current changes in the economy?

For divorcing couples the current economic situation caused by coronavirus is causing concerns about whether they can still reach a financial settlement or indeed whether that should be avoided given such financial uncertainty.

Of course, if your relationship is over you may well want to move on completely, and that will include reaching an agreement about joint finances. This is still possible, there are just a few issues you should bear in mind.

Likewise, if you have already reached a financial settlement with your husband or wife or you have a financial order in place, there are things to think about. Whilst the social and financial landscape has changed a lot in recent weeks, it is unlikely to have a huge impact on your financial settlement, you may however want to make some tweaks or agree some short-term arrangements.

Implementing your financial settlement

Property
If you have a house to sell (or you are in the process of selling) things are likely to stall for a while. Be proactive – think about:

– Who will need to pay for what and where people will live if there is a delay?
– Is it a good time to take stock? To look at houses and schools online for example.
– Do you have paperwork you need to get up to date? Application forms, financial information, legal documents for example.

Assets
The value of most investments has fallen over recent weeks. If you have assets to sell is it imperative to proceed or can you wait for the market to settle?

Negotiating a financial settlement
If you are still in the process of negotiating financial arrangements then you might feel wary of pursuing a settlement when things are so uncertain. Courts are dealing with what they can by telephone and video hearings, but the reality is that the system will take some time to catch up. Lawyers are also getting to grips with remote working and, in a lot of cases, juggling home working with home schooling so you in all likelihood have some time. Pause if you need to:

– gather information and explore options,
– revisit valuations if you need to do so,
– seek expert advice on pensions, finances and tax (it might be worth asking experts for an opinion on what they think has changed and how the position will look in 6 months’ time),
– agree a mortgage holiday,
– share information about changes to income now (as well as the likely impact on future income) to limit short term debt and see where you can make interim savings on outgoings,
– try to come to a temporary arrangement for maintenance and child support if your income is affected,
– look at what you can do to preserve savings.

Keeping your court case moving
If your case is already before the Court and you want to keep pushing things forward:

– Deal with directions hearing by agreeing draft orders for the court to approve (avoiding waiting for a hearing)
– If you can’t agree whether you need particular information or expert advice or if you are stuck on letters of instructions for surveyors, actuaries, accountants or medical experts, consider asking an arbitrator to decide (without waiting for a judge to become available)
– If you feel that you have all the information you need and require some feedback from a judge to move your negotiations forward, ask your lawyer about arranging a private FDR (this means that you can keep the process moving and the financial dispute resolution exercise can take place remotely via Skype or Zoom).

Use your time wisely, double check anything that feels unsure and explore the options available. Above all, don’t panic – it is ok to pause for now.

Kathryn McTaggart
Professional support lawyer

Blog Author - Kathryn McTaggart

Kathryn McTaggart Kathryn McTaggart

Kathryn is the firm’s Professional Support Lawyer (PSL), working to ensure the family law service we provide remains innovative and, above all, client and child focussed.

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