Q&A – Divorce and your Finances
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I am divorced - will my Decree Absolute protects me from financial claims?
Your Decree Absolute will simply end your marriage. It will not prevent a Court from dealing subsequently with your former spouse’s financial claims. Even if you entirely agree about what should happen and you have implemented that agreement, for example by selling the family home and dividing the proceeds between you, you should still have that agreement recorded in a final and binding court order, known as a Consent Order.
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How do I deal with my finances following divorce?
You need to enter into a financial Consent Order detailing the terms of the agreement you have reached with your spouse. You and your spouse need to decide how you will share the matrimonial assets. This includes capital assets, liabilities, pensions and income. As family law is discretionary, there is no formulaic approach as to how finances should be dealt with on divorce as every case has a different factual matrix.
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How do I get a financial Consent Order?
If you and your spouse can reach an agreement in relation to your finances, that can be drawn up into a financial Consent Order by a solicitor and lodged at Court with a £50 Court fee for the consideration and approval of the Judge; after which, it is binding.
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What if we can’t reach an agreement regarding our finances?
There are a variety of ways of resolving financial issues following divorce. If discussions with your spouse fail, you could instruct a solicitor to negotiate on your behalf, you could go to mediation, you could try collaborative law, you could arbitrate or you can issue Financial Remedy proceedings at Court. If an agreement cannot be reached by consent using any one of these processes, the end point is for the Court to impose a Financial Order at the conclusion of Financial Remedy proceedings.
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What is Arbitration?
The best way to describe arbitration is the appointment of a private judge. Arbitrators are specially trained family solicitors or barristers who are trained to adjudicate on matrimonial disputes.
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Is arbitration new?
No, arbitration has been used in other areas of law for a long time but it is relatively new to family proceedings. Arbitration was introduced to deal with financial matters following divorce in 2012 and matters involving arrangements for children in 2016.
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How does arbitration work?
Both parties must agree to arbitration as a starting point. They then select their arbitrator who will be a specialist family law solicitor or barrister who has qualified as an arbitrator. If they don’t want to choose, the IFLA can appoint an arbitrator. The arbitrator and the parties will then timetable the matter and take it forward.
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What sort of things can arbitration deal with?
Arbitration can deal with anything from a single issue such as whether a property should be sold or whether monies contributed to a property purchase from a family member is a loan or a gift to dealing with the matrimonial finances as a whole.
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Is arbitration binding?
Yes. After hearing the case (whether a single issue or global finances), the arbitrator will make an “award” which is binding. The “award” is then converted into a financial Consent Order.