COVID-19 has affected almost every aspect of our lives, and it is clear that it will continue to do so for some time. One of the most worrying effects for many people is financial, with many people’s incomes being significantly reduced. This is particularly worrisome for people who have a financial order in place and either cannot afford to pay maintenance or have had their maintenance reduced or stopped. Within this article, we consider the three most commonly asked questions regarding financial orders and COVID-19.
1. I have a financial order and I am required to pay maintenance which I can no longer afford, what can I do?
The first step will be to contact the other party as soon as possible to let them know that you cannot afford to continue to pay maintenance at the current rate or at all and send them evidence in support, showing that your income has ceased or has been significantly reduced. You need to try to negotiate and agree temporary arrangements. However, you should not use the current situation as an excuse to stop paying maintenance, if you can afford to pay maintenance, you need to continue doing so even if it is at a reduced rate. Remember that this may be the other party’s main source of income, so both parties will need to try to be considerate and understanding whilst discussing alternative arrangements.
If you are unable to reach an agreement, you could apply to the court to vary the terms of the order, which the court has a power to do under s31 of the Matrimonial Causes Act 1973. The court are unlikely to consider a variation unless there has been a significant change in circumstances. However, COVID-19 has had such a detrimental effect on so many people financially, this could very well fit the bill. Having said this, the process of varying a financial order is both lengthy and costly, with each party having to exchange up to date Forms E and disclosure – essentially repeating the process that you would have gone through to obtain the order in the first place. Usually, we advise that this process can take anywhere between 6-12 months. However, because of the lockdown, the courts are prioritising their caseload and variation applications are not considered a priority, meaning that the process will likely take far longer than usual. We therefore recommend that this option be used as a last resort if you are unable to come to an agreement with the other party.
2. I have a financial order and my ex-spouse has stopped paying me maintenance, what can I do?
The first step will be to talk to the other party. They should not stop paying you maintenance altogether, you could perhaps agree a temporarily reduced payment until their situation improves. If your ex-spouse continues to refuse to pay maintenance, you could apply to the court for to enforce the order, but it is important that you bear in mind how costly and lengthy this process is likely to be. You could also consider applying for universal credit and contacting your banks and mortgage provider to discuss a payment holiday.
3. I am in the process of reaching financial settlement, how will I be affected?
You must make sure that you are exchanging up to date disclosure so you each have a full understanding of the other party’s assets and needs. If your circumstances change at all, you need to let the other party know as soon as possible, and bear in mind that your circumstances could continue to change as the lockdown continues. It may be necessary to revisit valuations of assets, for example properties, pensions or investments as these have all been affected by COVID-19. You may find that actuaries will caveat their advice because of the uncertain and volatile stock market. Our experienced team of solicitors will be able to advise you and guide you through to financial settlement.
3 Top Tips
- Be open and honest – send the other party evidence of your situation.
- Keep the other party up to date – make them aware of any changes to your situation and let them know as soon as you receive an update.
- Be considerate and understanding of the other party’s financial situation – this is an extremely challenging time for everyone.