Divorce Financial Principles and Orders
The court has power to make various orders in respect of the matrimonial finances. The type of orders made involve the court in a difficult balancing exercise in an attempt to formulate a reasonable division having regard to the criteria in Section 25 of the Matrimonial Causes Act 1973. The types of orders the court can make are as follows:
PERIODICAL PAYMENTS
This is also known as a maintenance order and requires one party, typically but not necessarily the husband, to pay a regular sum of money to the other. The court no longer has any power in respect of child maintenance where the payment is made to or for the benefit of a child of the family. If a party with whom the children are living wants maintenance, he or she will have to apply to the Child Support Agency who deal with assessment and collection or payment under their own powers and rules.
This type of order is now less popular than it was. The court must, in all cases, look at whether a clean break is possible and, if it is not, whether maintenance can be limited to a period within which the party receiving it can get to a stage of self sufficiency by earning his or her own income. Such an order might be appropriate where there are young children and the wife cannot earn enough to support herself whilst looking after them. Care will be taken to ensure that, if the wife is in receipt of benefits such as income support the maintenance will not disqualify her from such benefits. This is less of a problem where the husband is well paid. Where he has only a modest income, periodical payments to the wife would stop her from claiming benefit and neither party could survive, the court would inevitably think about giving the wife more capital to reflect her entitlement. In this way the husband would be let off any maintenance liability to her and would instead take less of the value in the house or other capital in order to achieve a clean break.
SECURED PERIODICAL PAYMENTS
This type of order is a variation on the basic periodical payments order referred to above. The order might be appropriate where the court has heard evidence that the paying party might ignore any order for maintenance. Rather than leaving the receiving party to try and enforce the order the court can secure the payment by imposing a charge (a sort of court imposed mortgage) over the paying party's assets. If he does not pay, the wife can apply to the court to enforce the charge by an order for sale of the property to which the order attaches.
LUMP SUM ORDER
This is almost self-explanatory. The order provides for payment by one party of a capital lump sum to the other. This type of order might be used in respect of savings or cash which the court thinks that the receiving party should take. It is also common for a lump sum order to be made simultaneously with a property adjustment order.
PROPERTY ADJUSTMENT ORDER
This is dealt with above. Usually, the order relates to a house that the parties own jointly. Even if the house is in the name of only one of the parties the court can make various orders regarding the family home to include:
a) A transfer from both names to just one name. This may involve one partner paying a sum of money to the other, referred to as a "lump sum" (Note: this may be subject to a mortgage. Any Lender would need to be notified of the proceedings. The court cannot force a lender to remove a party from the mortgage, so the party retaining the property would usually promise the court ie "undertake" to pay the mortgage and instalments). Our Conveyancing Team will be able to assist you with any transfer documents.
b) A sale and division of the sale proceeds. This may happen immediately if there is enough sale proceeds for both parties to be rehoused (even with another mortgage). Our Conveyancing Team will be able to assist you with any sale/purchase of property.
c) A sale and division of the house proceeds at a later date ie, this may take place if there are young children of the family or a partner with health needs. The court could order the house should not be sold until the partner living in the home re-marries, cohabits or the children leave full time education.
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