Coronavirus (COVID-19) and Your Financial Settlement

Man paying for something online using debit card
Originally published on 27th March 2020 at 11:32 AM

If you're negotiating your financial settlement as part of your divorce or separation as well as dealing with Coronavirus (COVID-19), then the anxiety levels can start to feel overwhelming. But don't worry, we are here to help, and have put together some FAQ's and advice to support you.

Should we continue to negotiate a financial settlement in the current uncertainty?

This depends on what assets you have and how you are going to split them. You will need to balance your desire to be separated financially, with your ability to maintain the status quo and wait the pandemic out. You might get an in-principle agreement made to cover the long term and negotiate an interim settlement with a review it in three months. 

For some people, it will feel unthinkable to continue until the pandemic has passed. You should try and discuss what is best for the family rather than try and take personal advantage of what is a challenging situation.

The value of my investments have dropped dramatically, should we renegotiate?

At this stage, we don't know for how long the stock market will be depressed. Therefore, there's little point in renegotiating on today's values as these are not likely to be representative by the time the court seals your order. If you are using the value of shares, ISAs or pensions to get a fair division of assets, you may now need to wait to obtain more accurate valuations once the pandemic has passed. It might be a while before shares, ISAs or pensions recover their value – but, if you do not intend to cash-in this type of asset, and you won't be drawing a pension for a while, then you may feel you can continue with your settlement discussions.

Each case will be different so please speak with your coach (if you are a customer) or book a free 15-minute advice call if you'd like to discuss your options.

We are supposed to be selling property as part of our agreement – what should we do?

If you are selling the family home as part of your divorce your plans will be forced to wait as moving house where contracts have not yet been exchanged is now not permitted under the government guidelines. The Housing Minister Robert Jenrick MP said on Twitter (25th March): 

  • Buyers and renters should, as far as possible, delay moving to a new house while emergency measures are in place
  • If you're socially isolating or being shielded, it's important to try to delay and other parties should show pragmatism
  • If moving is unavoidable because you're contracted, and the parties aren't able to agree to a delay, you must follow advice on social distancing when moving

Unless you are under contract, you should not be progressing a house sale. If you're under contract, try and agree on a reasonable way forward with other buyers and sellers. Removals are likely to be the biggest issue, so check what arrangements can be made first before agreeing on a date for completion.

My consent order's gone to court, but everything's changed – what can we do?

If you have only just sent the order to the court for approval, and the court fee has NOT been taken, i.e. the order has not yet been processed, then you can call the court enquiry line on 0300 303 0642 and ask the court not to process your consent order. (You will need to quote your case number). Ask for the return of the papers. You may need to email the court too – but the enquiry line will let you know what to do.

If the order has already been processed, then it's harder to get it stopped and returned. It is at the court's discretion. You may have to accept that the dye is cast (see below). 

The court has approved our consent order – but everything's changed, what can I do?

Negotiate an unofficial change to the order with your partner once the order is approved. If your requests are reasonable based on your new circumstances and your partner agrees, then you can decide not to follow the order (permanently or temporarily). It's best to get a written agreement to any changes you make and if they are permanent or temporary. In these circumstances, the paying person, strictly speaking, will be in breach of the original order, and the recipient could seek to enforce the original order at a later date.

Approach the court with a 'variation' to your consent order. This means submitting a new draft order to the court, asking the court to change the original order because of a change in circumstances. The court's primary concern will still be the welfare of your children. The court will consider current changes in circumstance but also any future changes too – so a temporary devaluing of assets due to the current pandemic may not be sufficient to warrant a modification of an order if the court thinks finances will bounce back. The court only has the power to change certain parts of your order.

  • The court can change: 
    • an order for sale (but only when the property is yet to be sold)
    • maintenance orders (spousal or child) 
    • lump sum orders by instalments
    • the court can also vary Pension Sharing Orders (PSO) IF you've not yet been granted your Decree Absolute
  • The court can't change 
    • a property adjustment orders (where you have agreed to, or transferred, a property), or where you have a Mesher style order (although it can vary the trigger events of a Mesher order)  
    • lump sum orders (unless they are by instalments)
    • Pension Sharing Orders if your decree absolute has been granted (even if your PSO hasn't been implemented)

amicable offers a couple's order variation service, so please get in touch.

My circumstances have changed, and I can't afford to pay child maintenance.

Chances are its equally tough for your co-parent, and they may well be worried about their ability to keep their household running too. Try and have an open conversation about what you can both afford and what adjustments or budget cuts can be made to reduce outgoings. Banks are extending overdrafts, and you may be able to get credit/loan to cover essentials or speak to your employer about what financial assistance they can offer. If you can work things out together rather than making unilateral decisions, then you are more likely to find a sustainable way forward. 

amicable offer one-off coaching sessions for couples to help resolve specific issues – please get in touch if you'd like more information.

If it's not possible to negotiate a change, then you or your partner can approach the Child Maintenance Service (CMS) for help. Contact the CMS on 0800 171 2345, or go to the website.

We have a court order for child maintenance, but my ex is not paying/ I can't afford to pay - what can we do?

If you can renegotiate together, then this is the best, quickest and cheapest way forward. Please book a coaching session if you would like some help to agree your payments under the current circumstances. 

If you can't agree then remember a child maintenance order is enforceable by the court for up to 12 months. You can make an application to the court to enforce your order. Call the court enquiry line on 0300 303 0642 to find out how. After 12 months, the court no longer has jurisdiction for child maintenance (unless the paying parent earns more than £156,000 per annum). You will need to follow the advice above and contact the Child Maintenance Service (CMS) to agree child maintenance moving forward.

We have a court order for spousal maintenance, but my ex is not paying/ I can't afford to pay - what can we do?

Try and renegotiate a temporary solution yourselves. Have an open conversation about what you afford or what you need to keep things going. Remember your outgoings have probably changed dramatically and may have reduced. Seek a mortgage or rent payment holiday if you can. 

The government has just announced measures to help self-employed workers too, so check out whether this will help you. Try and think flexibly – this is a short-term crisis and adjustments will need to be made, so try not to entrench yourselves into polar-opposite positions. When discussing, set out with a mindset to address each other's concerns and see where compromise is possible. Avoid 'I go high, you go low, and we meet in the middle' negotiation… this is an adversarial approach and looking at both your needs is a much more effective strategy. Also, be reassured this is not re-setting what will be paid in future – this is just for now.

If you can't reach an agreement, then see above for approaching the court on changing the terms of your order. The court has the power to make a variation on spousal maintenance.

amicable is here to help and support you through this challenging time, so please get in touch to discuss your specific circumstances. 

Related articles: Covid-19 & Co-Parenting

About the author

Kate Daly is a co-founder of amicable and host of The Divorce Podcast. Kate is a divorce expert and helps couples and separated parents navigate divorce and separation amicably. She's passionate about changing the way the world divorces and campaigns for fairer divorce laws and access to justice.

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