What can you do if coronavirus (COVID-19) has an impact on your financial settlement?
Is coronavirus (COVID-10) having an impact on your financial settlement? We look at your options.
COVID-19 is already having an enormous impact on the economy and our day to day lives. Jobs disappeared overnight, property cannot be sold and pension values have significantly reduced with share prices having tumbled. Many of you will be in the process of finalising a financial settlement with an ex-partner based on your circumstances in healthier times. Some of you may have only recently reached a financial settlement, which has been recorded in a legally binding document (known as a Financial Consent Order), but are now unable to fulfil or comply with the terms. So what options do you have?
What if you haven’t yet reached a financial settlement?
Both you and your partner have an ongoing duty of financial disclosure. If your finances have been hit hard by the impact of COVID-19 it is important that up to date financial information is exchanged, to ensure that you both have a full understanding of what assets and financial resources there are, and importantly what your respective financial needs are.
Considerations may be whether you can still afford to take on the mortgage over the family home in your sole name, whether your mortgage capacities will have changed (if your have had a sudden loss of income, especially if you are self employed) or if the value of any capital assets (such as shares) that you were going to liquidate have reduced significantly. It may be that you would be better off to defer the division of your assets, but this needs to be given careful thought.
Legal advice should be taken before reaching any agreement with your ex-partner, to ensure that all options and practicalities have been considered, to ensure that you are as financially secure as possible.
What if you have a Consent Order in place?
Don’t panic! The Family Court has power to “vary, suspend, rescind or revive” any Order. An application can be made to the Court on the grounds of there being a “subsequent event, unforeseen and unforeseeable at the time the Order was made, which invalidates the basis on which the Order was made”. It would appear that a pandemic would fit this bill. We are, after all, living in unprecedented times.
Case law suggests that applications to the Court should be made “promptly”, and so getting legal advice as soon as practicable would be encouraged. Many family solicitors now offer telephone interviews or video interviews via platforms such as FaceTime, Skype or Zoom.
Many Orders may have only recently been approved by the Court, which contain time limits by which the family home to be sold or transferred, shares to be liquidised, or a lump sum to be paid. If those actions are still to be fulfilled, the Court is able to make a new Order “if the basis upon which the Order was made has fundamentally altered”.
In the cases where your income has dramatically reduced it may be necessary to apply vary the amount of the payment that you make (or possibly discharge it completely) due to your changed financial circumstances.
Don’t panic, but contact your solicitor to consider and discuss your options. Hopefully through careful negotiation a compromise can be agreed the need for court avoided. Solicitors can often offer a collaborative or mediated approach.
If you would like to speak to one of our experts about this topic, please call us on 0800 2800 421 or contact us here.