Dealing With Debt and Divorce

Written by Payplan Ryan on 16 May 2012

In spite of all the good intentions you might once have had, sometimes two people in a married relationship simply have to accept that it’s the best for both parties if the relationship is ended and the marriage dissolved.

A marriage (or civil partnership) is a legal joining of two people, and therefore if the two parties decide to legally seperate then they must apply to the court to do so.  This process is known as divorce, and while the divorce process is much simpler than it was many years ago it can still cause complications, particularly if the split isn’t amicably approached by one or both of the parties concerned.

You should think carefully before proceeding with a divorce.  As well as the emotional upheaval that is felt before, during and after such a split, many people find that a divorce is a very costly exercise.  Even if you are eligible for Legal Aid, you’re still expected to divide any financial (i.e savings, debts, pensions) and physical assets (i.e., house, car) in a manner that is fair and reasonable.

What Are The Steps To Divorce?

A divorce usually begins when one person decides to formally end the marriage, although in England & Wales you must have been married for more than one year before you’re allowed to apply for divorce.  Someone who initiates the divorce procedure is called the petitioner (because they need to file a petition to the court) and the other person is called the respondent (because they are required to respond to the court during the process).

You need a legal reason to get divorced and the divorce will proceed more smoothly if both parties agree on the reason for the divorce, so it would make sense to discuss this fully between yourselves.  If the respondent were to contest the decision in court this can result in expensive and unnecessary delays that could be avoided had you agreed this from the offset.

The petitioner normally appoints a solicitor to represent them during the divorce.  If there are children involved in the marriage, a formal arrangement to state how the children will be looked after during and after the divorce must be agreed before the petitioner then applies to the court to acknowledge that a divorce has been requested.

After the respondent has formally accepted the petition, the petitioner can then request to the court that a decree nisi is issued.  This is in effect a legal announcement of the intention to divorce.  Six weeks and one day after the degree nisi is issued, the petitioner may apply for a decree absolute, which is the legal order that finally dissolves the marriage. However, if there are complications and disagreements between parties this could take longer.

You may qualify for Legal Aid to assist you during your divorce, although depending on your circumstances you may have to repay this at some point in the future.  If you think you are eligible for legal aid, telephone Community Legal Advice on 0845 345 4345 (calls are not free).

Division Of Assets

When a couple divorce, they are expected to formalise their financial and support arrangements for any children, and then divide the assets that are held by both parties in a responsible and fair way.  As people have many different personal circumstances these days, there are no hard and fast rules employed by courts to assess how the assets of a marriage should be split.

Instead, a couple are encouraged to discuss and agree how assets should be divided between themselves, and the court will generally only become involved if it feels that the division as presented to the courts is significantly unfairly biased towards one person.  You could use a family lawyer or some other professional mediator to help you decide on how to split assets, but obviously if you can agree on a fair split yourselves then this works out much cheaper than if you needed professional help to agree on what assets you will each take from the marriage.

There aren’t any hard and fast rules when it comes to the division of assets, so the court generally hopes that a common sense agreement can be made in most cases.

Bank Accounts

Most married couples these days have a joint account that both use for joint purchases such as weekly groceries and consumables for the home.

Once you’ve both agreed to divorce, it may make sense to change any joint accounts and make other arrangements to deal with such expenses, as both parties are liable for any overdraft on the account.  If the divorce is not amicable, then it’s possible for an irate partner to run up an overdraft in that account with no intention of repaying it.  The other partner would then also be liable for repaying this.

In order to separate any money in any bank accounts, you’d need to discuss who is entitled to what.  Bear in mind who pays into the various accounts, money needed for children’s expenses, and any money that may have come to one person in particular such as inheritance money.

Child Maintenance

Child maintenance is a court-approved regular payment that the child’s main carer is paid by the other parent in order to help maintain the day-to-day care of a child whilst they are in full time education.  Child maintenance is intended to help to provide things like clothing, food, and leisure expenses, and such financial arrangements can also encourage both parents to stay actively connected to their child’s upbringing and development.

Contrary to popular belief, the amount paid as child maintenance is not usually set by a court at a fixed rate for everyone.  In fact you’re encouraged to agree a child support arrangement amicably between yourselves, and such an informal arrangement is commonly known as a ‘family arrangement’.

A child maintenance family arrangement needn’t be a set amount of money that’s paid regularly, an estranged parent may agree to take responsibility for school uniforms, sports equipment, leisure expenses or anything just so long as both parents agree to the arrangement.

If a family arrangement can’t be made, perhaps because the relationship between the parents is particularly bad, then you can still look at making a child maintenance arrangement through the Child Support Agency (CSA)

A Final Word…

This is a guide only.  As everyone’s circumstances are different, we unfortunately can’t cover all aspects of divorce in this guide but we hope we’ve given you some helpful information to get you started.

As a general rule, the more amicable you can proceed through the divorce process, the less it should cost you.  But even so, all divorces will involve some sort of expense and division of assets, so you need to be prepared for at least a temporary loss of income, or increased expenditure, or even a complete change in circumstances.

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This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

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