Page 34 - BWS_Bury69_Web
P. 34

 Legal Advice
 Financial settlements and
Covid-19
Melanie Pilmer, of Greene & Greene Solicitors, considers the impact of the pandemic on divorce settlements
 It is more important than ever for separating couples to take legal advice regarding their financial settlement given the uncertainty due to the Coronavirus pandemic.
If you find yourself in this position, there are three potential scenarios to consider:
n Firstly, is it safe for you to agree a financial settlement at the moment?
n Secondly, if you have already reached an agreement, is it possible to now unravel that settlement if there has been a change in your circumstances?
n Thirdly, if you already have an approved court order, can that now be changed?
What if you are agreeing a settlement?
The economic uncertainty creates a perfect storm.
Some banks are withdrawing or restricting lending, leading to uncertainty as to how much you may now be able to borrow or raise by way of mortgage. Equity values have been extremely volatile with dramatic swings in prices. Pensions have also been significantly affected; in particular Defined Contribution schemes (typically invested in the stock market) have seen values fluctuate markedly.
A number of couples will need to sell their properties as a result of their separation. As the housing market reopens many estate agents are expecting a surge in properties being put up for
34
sale. The impact of this on property prices is presently unknown and gives rise to uncertainty about future borrowing. Lenders may ask for updated proof of income from applicants which could well show a reduction from the original figures provided.
Any current settlement discussions should be approached with a great deal of caution, especially if assets may have already lost significant value, coupled with very real uncertainty in the future. All assets valuations already obtained should be updated.
What if you have already agreed a settlement?
If a settlement has already been reached which provides for a buyout of the other spouse’s interest in the family home, it might be possible to seek an agreement with the other party to extend the timescale, but will any required mortgage offer still be available in the future?
Couples will need to think carefully about whether any agreement reached is still appropriate. Where one party considers a prior agreement is no longer appropriate they will need to try and renegotiate terms with the other party as soon as possible.
However, in some circumstances it might be too late and an application could be made to hold the parties to the agreement already reached.
Much will depend upon the stage the negotiations have reached and what specific impact Coronavirus has had on
the parties circumstances. It is therefore essential to take expert advice as soon as possible, if you consider your settlement may no longer be fair.
What if an order has already been made by the court?
If an order has already been approved by the court it might be necessary to ask the court to extend the timeframe for complying with aspects of the order, such as the timing of payment for any lump sum.
Many people may find they need to renegotiate maintenance and child support payments. Some may have lost their jobs, whilst others may be receiving reduced pay after being placed on furlough. Many of those who are self- employed have seen their income completely collapse and for those whose average trading profit was over £50,000 in the last tax year there is little (to no) support available.
The court does have the power to revisit settlements, but it does so rarely, and the circumstances in which it will do so are very limited. Reductions in asset values such as a sharp drop in the value of listed shares, however extreme, are unlikely to justify the court setting aside an order. The financial crisis of 2008 was held by the court to be insufficient to meet the strict test to allow a settlement to be revisited.
In some circumstances it may be possible to apply for variation of an order, particularly if all of the terms have not yet been finalised. Specialist advice is essential if your circumstances have changed and you need to consider whether your existing order can be varied.
Further information
Please contact Melanie Pilmer in our Family & Relationships team on 01284 717418 or melaniepilmer@greene- greene.com
For more information on the services offered by Greene & Greene Solicitors visit www.greene-greene.com and follow on Twitter @GreeneGreeneLaw
 




































































   32   33   34   35   36