Divorce Financial Settlement | FAQs - Everything You Need to Know

Originally published on 25th July 2022 at 11:37 AM
Reading time: 7 mins

When a couple goes through a divorce, the financial side of separating and legalising what has been agreed is sometimes called a divorce financial settlement.

There are, confusingly, many names for the same thing as it's also known as a consent order, clean break consent order and financial order.

What's important is not what it's called but what it actually does: a financial settlement when you divorce outlines how the finances will work post-separation. It's a legally binding document that is sent to and formalised by the courts. In this post, we answer all of your questions about financial settlements.

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What's included in divorce financial settlements?

In order to get your financial settlement for divorce arrangements signed off by a judge, you need to share a snapshot of your finances. This includes things like:

  • Assets and debts (including business assets)
  • Income
  • Investments, savings and shares
  • Pensions

You also need to outline what you have agreed with the finances post-separation. For example, what will happen with any property, if spousal or child maintenance will be paid and to who, the value and of any lump-sum payments.

Why should you get a financial settlement?

Many people aren't aware that a divorce doesn't end your financial relationship with your ex. In England and Wales, you need to have a consent order (also known as a divorce financial settlement) approved by the courts.

Formalising your financial settlement when you divorce is crucial because any unresolved financial claim could arise further down the line,  even if you are divorced .

Therefore, it's important to that you and your ex partner get your financial arrangements sorted with a legally binding consent order / financial order that outlines the financial settlement for your divorce that you both have agreed to.

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When should you agree the finances?

It's recommended that financial divorce settlements are sorted at the same time as divorcing / ending your civil partnership. amicable's divorce specialists are often contacted by people who have already divorced but are yet to formalise their financial separation.

They are often unaware that in order to get a consent order through the courts, they will need to share a snapshot of their current finances, not what it was when they separated.

As you can imagine, sharing your finances with an ex years later can be uncomfortable.

In general, the two main factors that will have the biggest impact on whether you can come to a financial settlement in your divorce is how complicated your financial situation is and how well you can communicate and negotiate with your ex.

Toi avoid any financial issues, it's really important that you get the right advice and understand what options are available to you before you dive into soring things out.

It's equally as important that you're both emotionally ready to talk about how the finances are going to split and manage your money moving forward and what this will mean for your futures.

If one person feels rushed into the discussions this can lead to them stalling which will prolong the process and make coming to an agreement difficult and is also the main reason divorce can become so expensive.

How are assets usually split in a divorce?

The starting point  when you begin working out how things will be split is to divide everything 50/50. You can then start discussing what you'll both need post split and what's fair. A family law judge will then review your agreement to ensure that it's fair. There are many considerations that a judge will take into account including:

  • How old you and your partner are
  • You earning ability
  • Money and property (family home)
  • Living expenses and the standard of living you both have
  • Assets and debts
  • Business assets
  • The role you held within the marriage

You can read more details on what a judge considers in this blog.

The main priority, however, is the agreements and arrangements for any children involved, such as child maintenance and housing.

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How much does a financial settlement cost?

On average, it costs £8,000 per person to sort your divorce and finances through two separate lawyers.

If things become acrimonious and you're not able to agree through lawyers, the cost of going to court can spiral with the associated estimated cost at £13,000 per person outside of London, reaching £40,000 per person in London, although these fees can be higher. 

Using amicable is alot cheaper than the above as we work with both people and use technology to reduce expensive overheads.

The cost for amicable writing up your agreement costs £953 per couple - this includes the government court fee. If negotiation support is required there are a few options based on amount of support you need.

If you want to understand if your agreement is fair, we have our Assisted Divorce and Consent Order Service or our Assisted Consent Order Service if you’ve already started your divorce on the government website.

If you would like support reaching an agreement, we offer guided negotiation support, with over 90% of our customers reaching an agreement without needing to go through expensive and drawn-out court proceedings. To find out if our negotiation services are the right option for you and your situation, use our diagnostic tool, or book a free 15-minute consultation at a time to suit. This can be an individual call or a joint call.

Financial settlements can go two ways

1. You both agree to a financial settlement and are amicable

In England and Wales, you can sort your agreement without involving mediators and lawyers if you don't have complex financial issues, have not been married for very long or simply get on well with your ex, despite getting a divorce.

To legalise your arrangements, you'll need to start divorce/dissolution proceedings and formalise your agreement by getting a consent order drawn up. A consent order outlines how all assets, including investments, savings, money and property (such as the family home), along with the spouse and child maintenance, are divided.

Use our free tool here to find out what service will work best for you.

2. No Agreement - Application for a Financial Settlement Through Court

If you're not able to or it's not safe to sort out your finances amicably, you can seek support from a mediator and family lawyer.

If these routes don't work out, you can apply for a court order and ask a judge to agree on your behalf.

To qualify for a court order, there needs to be evidence that you both went to at least one mediation meeting. The only exception to this is when social services or domestic violence is involved.

For legal advice on acrimonious splits, visit the Citizen's Advice Bureau or Resolution as a starting point.

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Financial Settlement FAQ's

Do you need to go to court to get a divorce settlement?

Generally speaking, the court is not necessary for most divorce cases. If you can agree on the details and have a fair agreement, court won't be necessary.

In some divorces, a judge from the family law court may request more details of how the agreement was decided and ask if the details are understood if it appears to be unfair.

How long does it take to get a financial settlement?

For a divorce/dissolution only - it takes a minimum of seven months to complete the process.

If you're sorting out your finances and going through the court to make your financial agreements legally binding and are amicable the process takes on average nine to ten months. If things are acrimonious and need to go through court, it can take a lot longer.

Does the ground of divorce I used matter when it comes to the financial settlement?

It doesn't matter which ground for divorce was used when determining your financial settlement.

The financial agreement shouldn't have anything to do with the reasons for your marriage ending.

The things to consider when agreeing a settlement about your finances will include:

  • Child maintenance payments
  • What will happen to the family home
  • How to separate your assets and debts
  • Both of your earning potentials
  • How long you were married
  • And, ultimately, if the agreement is fair or not.

Is it best to sort the financial settlement before, during or after the divorce process?

You won't be able to apply to the court for your consent order until you've reached the decree nisi part of your divorce/dissolution which means you need to start divorce proceedings first.

It's often best to arrange your financial consent order alongside the divorce/dissolution process.

For more information on financial settlements in divorce and dissolutions, book in for a free 15-minute call here.

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Speak to an amicable Divorce Specialist to understand your options and next steps for untying the knot, amicably.

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