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Sorting out your finances after divorce

Divorcing or separating from your spouse can be one of the most emotional and stressful experiences of your life. Whether you wanted to end the relationship or not, a breakup can turn your world upside down triggering painful emotions. Getting married brings with it a sense of hope and when things don’t work out it can leave you feeling profoundly disappointed and lost. Sorting out financial arrangements with an ex-spouse is often one of the most difficult aspects of divorce. The decree absolute legally ends your marriage but it doesn’t end the financial relationship between you. That’s why it is very important to protect your finances both now and in the future by getting the right legal advice

Reaching a financial settlement

Agreeing finances is a separate process to the legality of finalising a divorce. You can reach a financial settlement any time during the divorce proceedings, but most of the time financial arrangements are dealt with at the same time.

A financial settlement is a term used by the court to describe financial proceedings related to divorce. It is the way in which the court separates assets and finances. Through mediation and the help of your family lawyer you might be able to come to agree financial arrangements with your ex-spouse without needing a court to impose the decision on you.

If you and your ex-spouse’s finances are complex or you can’t come to an agreement then you may need to go to court to reach a financial settlement. Perhaps one of you has a medical problem that affects your ability to earn money, or one has considerably more assets than the other. Whatever your circumstances you will need to show the court that you have attended mediation first (unless social services are involved).

The first step is for you both to be open and honest in disclosing your resources. This is called ‘financial disclosure’ and everyone has a legal obligation to be honest. The aim is to work out what you both need in order to make ends meet.

Paperwork could include:

  • Bank statements
  • Business accounts
  • Credit card bills
  • Loan statements
  • Mortgage statements
  • Insurance policies
  • Pensions
  • Recent property valuations
  • Savings
  • Wage slips

If your ex-partner refuses to disclose their finances you can apply to the court and a timetable for financial disclosure will be set.

How financial arrangements are decided

There are three principles which the court applies when deciding upon financial settlements:

  • The sharing principle

As a starting point ‘matrimonial assets’ should be divided equally. These assets include pensions, savings and the value of your home.

Some assets might be considered ‘non-matrimonial’ if they were owned by one of you before the marriage.

This principle doesn’t apply to income. The contribution of a stay-at-home mother or father is equal to that of the breadwinner.


  • The needs principle

Although the sharing principle is the starting point for sorting out financial arrangements, the finances you both need in order to manage in the future and your ability to earn is also taken into account. This includes the housing and income needs of you and your children (including food, clothing, childcare costs, school related expenses etc.)


Most families find that their finances are stretched after divorce or separation because they are running two households instead of one. You will need to work out what expenditures you both have and how both your needs will be met.


  • The compensation principle

This principle is a little woolly. The idea behind it is that if somebody has given up a career to bring up children they should be compensated, but this tends to be addressed under the needs principle.

In any financial settlement the needs of the children (in terms of child maintenance and housing) are always top priority. The length of time you have been married is also taken into account.


Applying for a financial order

In England and Wales once you’re divorced you can still make a financial claim against an ex-spouse, and there is no time limit for doing so. It’s important to protect yourself from future financial claims against you by turning your financial settlement into a court order. Even if you don’t have any assets now it is still a sensible move because your ex-spouse could make a claim against you if your finances improve later (if you receive an inheritance, for example).

A financial order (also called a consent order) is a court order made by a judge without the need for a court hearing. Once your decree nisi has been pronounced you can make a financial order. The order sets out how assets will be split between you such as property, pensions, inheritance and any other capital. The order can cover child or spousal maintenance arrangements which are enforceable by the family court.

Financial orders normally include a ‘clean break order’. A clean break order severs all your financial ties after divorce so that you cannot make any future claims on each other’s finances. Some people choose not to have a clean break as part of the financial order and they might apply for a ‘partial clean break’ instead. This normally happens when financial arrangements are expected to change in future and there are children involved.

When you apply for a financial order the judge will only grant the order if they believe it is fair to both you, your spouse and most of all, your children. If they disagree with your financial arrangements they will ask you both for further information.

A financial order normally takes about 3-5 weeks to process depending upon how much there is to be considered.

Legal advice for peace of mind

QualitySolicitors Hopleys GMA specialise in financial proceedings relating to divorce and separation. We can help you to agree financial arrangements that achieve a fair outcome for the whole family, whether it’s through mediation or the court process. We work with you to protect your assets and livelihood both now and into the future. Contact our team on 01978 880 276

Posted in: Divorce

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