Financial Order Divorce: What is it & do I need one in divorce?
Divorce is a challenging process, not just emotionally but also financially.
In England and Wales, couples seeking a divorce must consider the division of their assets and financial responsibilities. This is where a divorce financial order comes into play.
In this comprehensive guide, we will outline everything you need to know about obtaining a Financial Order as part of divorce proceedings in England and Wales.
What is a Financial Order In Divorce Proceedings?
A Financial Order is a legally binding document issued by a court that outlines the financial arrangements between spouses or civil partners during or after a divorce. It specifies how assets, income, and pensions should be divided.
It’s essential to have a financial order to provide clarity and legal protection regarding financial matters after a divorce.
Spouses and indeed former spouses have legal rights to make financial claims against each other by applying to the Court for orders for maintenance, property, lump sums, and pensions.
These legal rights to financial claims can only be ended in two ways. The first and most common way is through a divorce financial order, and the second is through re-marriage.
The process of applying to the court is complex and requires the assistance of a legal professional, such as a family law solicitor.
Many couples assume that it costs thousands and therefore don’t bother ending financial ties. We have a low-cost alternative service that is just £399.
The court fee if you can agree is £53 and goes up to an initial £255 if you require the court to help you make a financial agreement.
Understanding Financial Orders
When a couple decides to part ways, there are two distinct elements that need to be addressed: the legal element and the financial element.
The legal element involves obtaining a divorce or dissolution of a civil partnership, while the financial element focuses on the separation of finances and the agreement on asset division.
It is a legally binding agreement between the parties involved and provides the framework for the division of assets.
Financial orders are essential for divorcing or separating couples as they provide clarity and protection for both parties.
They outline the agreed-upon financial arrangements and help establish a fair and equitable resolution.
What Can be Included in a Financial Order?
A financial consent order covers various aspects of asset division and financial arrangements. It can include:
1. Property Division
The agreement can outline how properties, including the marital home, will be divided between the parties. It may specify the sale of a property and the distribution of proceeds or the transfer of ownership to one party.
2. Pension Division
Pensions are significant assets that need to be considered when dividing the matrimonial pot. The order can specify how pensions will be divided, whether through a pension sharing arrangement or a lump sum payment.
3. Savings and Investments
You can also address the division of savings accounts, investments, and other financial assets. It ensures a fair allocation of these resources between the parties.
4. Debts and Liabilities
The order may include provisions for the division of debts and liabilities, such as loans or credit card debt. It outlines the responsibility of each party in managing and repaying these financial obligations.
5. Maintenance Payments
Financial support, such as spousal maintenance or child maintenance are often key elements of a divorce settlement. It establishes the terms and conditions for these payments, ensuring financial stability for both parties and any dependent children.
Types of Financial Orders
There are different types of financial orders that can be obtained depending on the specific circumstances of the couple.
Here are the most common types:
|Types of Orders|
|Consent Orders||If an agreement on asset divorce can be reached, it can be made into a Consent Order and submitted to the court for approval.|
|Property Adjustment||These orders redistribute property ownership between the parties.|
|Lump Sum Order||A lump sum order involves a one-time payment, usually to balance the division of assets.|
|Periodical Payments||These orders require one party to make regular payments to the other, typically for spousal maintenance.|
|Pension Sharing Order||They split pension assets between spouses or civil partners.|
|Clean Break Order||A clean break order is a specific type of court order that aims to sever financial ties between the parties completely. It is often sought by couples who have no ongoing financial obligations towards each other.|
When Should I Apply For a Financial Order?
In most cases, it is recommended to apply for a financial order after the Conditional Order (previously ‘Decree Nisi’) has been granted.
This is because the conditional order sets out the terms of the divorce, including the date when the marriage will end. Once this has been established, it is easier to determine the financial arrangements that need to be made.
However, it’s important to note that a financial order cannot be made by a Judge until the final order (previously ‘decree absolute’) is granted.
Seeking legal advice is important to ensure the application is made at the appropriate time.
In conclusion, it is typically best to apply after the conditional order has been granted but before the final order is made.
Delaying the application can in some cases have serious consequences.
Factors Considered By a Judge in Making Financial Orders
When making financial orders in divorce proceedings, the court considers a range of factors.
These factors include the income, earning capacity, property, and other financial resources of both parties.
As well as the financial needs, obligations, and responsibilities of both parties. This includes any financial obligations to children, as well as any debts or other financial responsibilities.
The court will also consider the age of each party, the duration of the marriage, and the contributions made by each party to the welfare of the family.
This includes both financial and non-financial contributions, such as caring for children or maintaining the family home.
The court requires both parties to provide open and honest financial disclosure to ensure a Judge has the full picture before making a decision.
This is usually done by completing Form E – a detailed document the court will require to establish the facts of your situation.
Ultimately, the court will look at all aspects of life to ensure that a fair divorce settlement is reached.
Financial Order or Clean Break Order – What’s The Difference?
A clean break order is a specific type of financial order that brings all financial ties between the parties to an end.
This means that neither party can make any further financial claims against the other. A clean break order is often desirable as it provides certainty and finality for both parties.
However, it is important to note that not all divorces will be suitable for a clean break order.
For example, if one party is financially dependent on the other, a clean break order may not be appropriate as it could leave the dependent party in financial hardship.
In these cases, a financial order that includes provisions for ongoing spousal maintenance may be more appropriate.
How long does it take to get a Financial Order?
With our online consent order service, you can receive a professionally drafted financial order within 7 – 31 working days, depending on how urgent it is.
How long does it take for a court to approve a divorce court order? If your financial order is straightforward and the Judge believes it to be fair and reasonable, the court will typically approve the application within 2 to 4 weeks depending on their specific workload.
This is of course, for couples who can reach a negotiated divorce financial settlement. For those who cannot reach an agreement, court proceedings can take between 12-18 months.
If you apply for a financial order alongside your divorce (after the Conditional Order), the financial agreement becomes legally binding on both parties.
How much does it cost to get a Financial Order?
Many couples don’t obtain a court order to end financial ties with their former spouse because they believe that legal fees are going to be thousands and ‘what’s the point if we have already agreed?’
Almost daily we have clients telling us “My ex won’t stop paying maintenance, we’re on good terms so there’s no reason for us to get the court involved”.
In reality, new partners often enter the picture and the once amicable relationship can turn less so fairly quickly.
Financial orders do not need to cost you thousands. We help couples save thousands in legal fees by offering a low-cost alternative.
Our online consent order service costs £399. It’s a fixed fee and covers both parties.
The cost of having a local solicitors firm prepare your financial order could range between £900 – £5,000 depending on the complexity of your agreement and where you live.
What to do next
It’s essential to understand the process, seek legal advice, and consider mediation to reach an amicable financial settlement with your ex-spouse whenever possible.
By doing so, you can navigate the complexities of divorce with greater confidence and clarity regarding your financial well-being.
If you are ready to take the next steps and put your formal agreement into a legally binding court order for one low-cost fee, get in touch with our team by calling 01793 384 029 or viewing our online service below.
Solicitor Drafted Consent Order Agreement – £399
If you have a formal agreement in place with your ex-partner and wish to formalise it into a legally binding court order without spending thousands, our online services are ideal for you.