Who Pays the Household Bills During a Divorce?
The period between deciding to separate and officially getting divorced can be quite difficult, particularly if finances are tight.
There will often be pushback from either spouse regarding the payment of routine household bills or quibbles about monthly expenditure.
So how should finances be dealt with during this tricky limbo period, whilst waiting for a decree absolute to be issued?
During separation, who pays the bills?
As a general rule, household bills should be paid in exactly the same way for the period between separation and divorce, as they were during the course of the marriage.
This applies to all the usual types of household expenditure, including:
- Mortgage/rent payments
- Utility bills
- Council tax
Most married couples fall into a routine of sharing out the various household expenses during the course of their marriage, and this routine should essentially continue as usual until the divorce has been finalised.
Ensuring financial stability is maintained during this period is in the interests of both spouses, as we will explain below.
What happens if my husband or wife stops paying the bills?
Both spouses should continue to pay any household bills they were paying prior to their decision to separate.
If regular bills are not paid during this period, this can lead to either or both parties receiving County Court Judgments (CCJs), which can make it harder to obtain credit in the future. In general, the person whose name appears on the bill will be penalised for late repayments.
However, it is important to remember that any debts accumulated as a result of late repayments will reduce the overall matrimonial pot, and will potentially reduce the share available to both spouses.
1) Joint mortgage payments
Where a divorcing couple has a joint mortgage, both divorcing parties are jointly responsible for continuing with their regular repayments. If there is any shortfall in the monthly mortgage payments, both spouses will be held jointly responsible for failing to meet their contractual repayment schedule. This can lead to financial penalties and even potential repossession of the property by the mortgage company.
2) Utility bills in one name or sole mortgage
If the house is in the name of one spouse – or if there is a sole mortgage on the matrimonial home – it will ultimately be the responsibility of the named person to pay the bills or mortgage repayments. But if they are reliant on their spouse for contributions to any of these payments, this can result in them finding themselves in serious financial difficulties. However, as discussed, this will affect both spouses, as it will lead to a reduction in the overall matrimonial pot.
What benefits can be claimed when separating from your spouse?
Home Rights provide both husband and wife with the right to carry on living in the matrimonial property – irrespective of who owns the property – whilst the divorce is in progress and before it has been finalised with a decree absolute.
For more information on Home Rights, see our Matrimonial Home Rights Application Service.
In addition to Home Rights, there are various benefits that may be claimed by either spouse during the period of separation, depending on their specific financial circumstances.
Potential benefits which can be claimed include:
- Universal Credit – this has replaced a variety of legacy benefits including housing benefits, income support, child tax credit and working tax credit.
- Job Seekers Allowance (JSA).
- Child Benefit – only one parent can claim this on behalf of each child.
- Employment and Support Allowance (ESA).
- Council tax discount – this is particularly relevant where a divorcing couple decides to live separately while they are waiting for the divorce. It is possible to claim a 25% reduction in council tax where only one adult is living in a property.
What is financial responsibility during separation or divorce?
In the period of time during which a married couple has separated but is not yet divorced, it is possible for either spouse to spend large sums of money held in personal or joint savings accounts.
Irresponsible spending during this period can result in a significant reduction in the overall assets available in the matrimonial pot.
In theory, a smaller matrimonial pot will mean that both divorcing parties will have less to share out in a financial settlement.
But the court can indirectly penalise a spouse who has not demonstrated financial responsibility during this period.
If one spouse has brazenly spent excessive amounts of joint savings, the court can reduce their share of the ultimate matrimonial pot.