Preparing For Final Hearing (Finances)

[Jumper85]

So, I'm only 5 weeks out until the final hearing for finances. It's been an extremely long road (2 years since separation) and a difficult one in which I've self-represented at all stages up to now and only spend roughly £4,000 on legal costs to date as focused on obtaining advice than rather spending unnecessarily. The strategy has served me well to date as the advice I've received is that I've been frugal and kept legal fees down in proportion to the equity available and I've done everything in the attempt to settle.

Where I now find myself is thinking I'm not prepared to go into a final hearing with a barrister. It's just far too risky from my perspective, I need someone to position my case and understand the legal system. I also don't know the ex's plan and whether she will be represented or not but that shouldn't inform what I eventually do.

I'm finding myself in a rock and a hard place. I can't afford what the ex is asking for, I've evidenced that but equally I can't afford to further accrue debt at the detriment of my borrowing capacity. Tough position to be in and I don't want the courts to perceive my circumstances as being careless in taking my case to final hearing given it's further detrimental to my position as I'll be ultimately asking for a greater share of the equity as a result of the costs I've incurred unnecessarily.

What are my options from her;

1. Represent myself and not incur and further legal fees other than what I've incurred to date
   • Risky as I'd be putting together my own final statement, strategy in court as well as my questions for cross examining the ex
   • A lot of work but I've experienced twice now putting a bundle together
   • The stress and time of doing this
2. Just finding a direct barrister to represent me and only incurring c.£4,000-£5,000
   • I'm still taking on the stress of pulling the court bundle together and also the positioning statement
   • Providing the barrister with all the relevant ammo will be imperative to the success of the hearing and is all on me
   • Barrister's are very hit and miss going direct
   • Seems the most cost effective way if you're lucky with a good barrister and have confidence in your own strategy and ability
3. Full solicitor and barrister representation - fees of c.£14,000 to c.£19,000 quoted
   • It's a significant amount of money that you need to be confident in being able to recover back if you go to final of which I am not
   • It takes a load off your shoulders... or does it? I'm sure I'll still feel anxious and still have all the gathering to do for the bundle
   • This option is most likely to get me the best result.... but will it? Will I recover the costs I've spent?

Lots to think about in such little time but thought I'd share my thought process and options and let others comment

 

[Unknown01]

I think it really depends what she's asking for and whether that is consistent with the FDR?

Also, in my case (and many others) the wives get it into their heads that earning capacity is something only the higher earner has to worry about. If your wife is lazy and workshy like mine, a female barrister cross examining her laziness does tend to be very handy.

 

[Ash]

I'd go with option 2. If you get the right barrister. MagicJ had a great one for his financials. Some will help you with some of the paperwork. They will usually include a position statement within their flat rate fee and might charge a minimal extra amount to check over the bundle.

Option 2 seems like the middle ground. Could be worth the £5,000 if it saves you money in the financial settlement.

I take it there's no chance of it being settled before a final hearing.

 

[Jumper85]

I think it really depends what she's asking for and whether that is consistent with the FDR?

Also, in my case (and many others) the wives get it into their heads that earning capacity is something only the higher earner has to worry about. If your wife is lazy and workshy like mine, a female barrister cross examining her laziness does tend to be very handy.

Oh nice, that's super useful! I'm working every hour God sends whereas she's been lazy her whole life and I can say that because it's true, she told me many of times she never wanted to work. Thanks @Unknown01

As for what she's asking for, well she is asking for near what the judge inferred at the FDR however the judge started to considered whether spousal was appropriate in our case, I think my problem at the FDR is that I never really got the opportunity to explain that spousal wasn't affordable from a mortgage capacity borrowing perspective. Agreeing any formal of spousal would massively hamper my ability to even get on the housing ladder, let alone buy a property to the value the ex was aiming for.

 

[Jumper85]

I'd go with option 2. If you get the right barrister. MagicJ had a great one for his financials. Some will help you with some of the paperwork. They will usually include a position statement within their flat rate fee and might charge a minimal extra amount to check over the bundle.

Option 2 seems like the middle ground. Could be worth the £5,000 if it saves you money in the financial settlement.

I take it there's no chance of it being settled before a final hearing.

I'm thinking the same, it might even be worth chucking the barrister and extra £1-2k to support with the positioning statement and ensure they're up to speed on the bundle.

 

[Unknown01]

I think with spousal it comes down to what the asset split would be. If she's going to get more than 50% of the shared assets, spousal maintenance on top is extremely unlikely. The court will be looking for whether a clean break is possible and nowadays it is the responsiblity of the person who doesn't want a clean break to show why this is not possible (in the old days, it would have been up to you to prove it was possible but things have changed). So, in other words, your wife will have to go to court and 1) explain why she cannot work more than she does and 2) why you're able to pay her more than she can claim in benefits in order to demonstrate a clean break isn't possible. The chances are if she's also asking for the lion's share of the joint assets, she will be told to jog on by the judge.

 

[Unknown01]

Incidentally, what are your net earnings after paying CMS calculated child maintenance? And what are her net earnings plus child maintenance at the moment (the sum total of her child benefit, other benefits, income and CMS from you)?

 

[Jumper85]

So the equity split that has been discussed to date is a 90/10 split in her favour. She wants spousal in addition to this, she's not interested in a pensions split. The 90% equity affords her a reasonable mortgage free home.

I don't pay any CMS as the children live with both of us on an equal 50/50 basis and is court ordered but what I have agreed is I cover all the children's costs informally.

Earnings wise - she earns £20,000 a year (could be £25,000 if she worked full-time) and receives universal credit of about £400 per month I believe but I'm not sure whether she would still be entitled to this on receipt of the equity.

I earn substantially more (multiples) which is the key factor here however my employment is volatile as I'm a contractor which is another factor as to why I couldn't commit to spousal. I will also need to take on a large mortgage on my own to afford a home and I'd be retaining all the marital debt too which is roughly £1,300 a month in payments. It's going to take me a considerable amount of time to clear that debt too.

 

[Unknown01]

Okay, your problem is the 50/50 split on child care which means there is no child maintenance. It opens the door to spousal maintenance being affordable to you in a way that it would not be affordable for most men in your situation who would be paying child maintenance. The courts won't care that you are a contractor and your employment is volatile because if you lost your job and couldn't find another one you could apply to vary (incidentally if you DO get a spousal maintenance order, the quickest way to get rid of it will be to "struggle" to get another contract when your current contract expires. As soon as you are out of work, you would apply for a variation. Obviously this is harder if you plan to have a mortgage but it is a good option if the maintenance order is stopping you getting a mortgage).

My own recommendation would be that if you are going to be paying your ex maintenance anyway, you might as well make her work for it and have something closer to a 55/45 split on child care. Keep this up for a year or two and then apply for 50/50 later when you already have a clean break and spousal maintenance is not an option for her.

Otherwise, in your situation, I think the court will order some spousal maintenance until your youngest is 11. As she will have a mortgage free home and you will have high housing costs it would be unrealistic of her to expect the same income as you as your needs will be much greater but I would anticipate spousal maintenance that in terms of quantum equates to what you would be paying her in child maintenance if there was not an even split on child care and for that to run from 3-4 years.

 

[Ash]

I would think if she wants a 90/10 split it should be without/in lieu of spousal. If she wants spousal it should be more like 70/30 with spousal only for 3 years to give her chance to retrain and earn more.

 

[Ash]

Posted at the same time as Unknown 01. I can't agree on changing the 50/50 childcare order - that's really important and beyond finances. If any spousal is ordered it should be limited to 3 years to give her chance to retrain and earn more. Particularly as she only has the kids half the time and you're providing for them the other half of the time. @MagicJ may have some tips here after his recent case (he also has 50/50 child arrangements) and I believe isn't paying spousal.

As Unknown 1 says though - an order for spousal can be varied at any time if you can't afford to pay it (eg if you had a big mortgage).

It would be very generous to agree to 90/10 so wanting spousal as well, when she only has the kids 50% of the time, is a bit much. Plenty of people run a house on 25k a year. Especially when they kids costs are covered by you. She can get a better paid job.

 

[Unknown01]

I would think if she wants a 90/10 split it should be without/in lieu of spousal. If she wants spousal it should be more like 70/30 with spousal only for 3 years to give her chance to retrain and earn more.

That will entirely depend on what Jumper85 is earning. Spousal maintenance is normally rare because after child maintenance, even men on around £100k a year cannot afford to pay any more (normal situation is lazy woman is claiming universal credit plus child benefit and doing half arsed employment, gets child maintenance and payer is not expected to pay any more because the universal credit would drop £ for £ and they cannot afford to pay more than the benefit).

The exception is 50/50 splits of childcare where one earns far more than the other. In this instance, spousal maintenance that equates to what CM would be in - say - a 70/30 split of child care and running until youngest is 11 is sadly quite common.

 

[Unknown01]

Recent example here: https://www.bailii.org/cgi-bin/form...ery=(spousal)+AND+(periodical)+AND+(payments)

 

[Jumper85]

I mean I thought tooth and nail to secure a "lives with me" order and 50% with the kids, I get your point on the strategy but I'd be massively reluctant to give her more time with the children, I might never get it back if I give that time up.

The biggest problem I have is that I can't afford spousal maintenance from a mortgage borrowing capacity perspective which is shown on the report. As it stands, if she took 90% that equates to £260k so can be mortgage free. She has a borrowing capacity of £70,000 so can afford a £330,000 home. I'd be left with 10% so roughly £26k. The maximum I can borrow based on my current debts is £260,000 so I can afford a home of £286,000. She's already able to provide better housing for the children. So if the courts then suggest 90% isn't enough and I should pay spousal, that spousal maintenance is going to further reduce my borrowing capacity which could mean I couldn't even afford a home. I'm equally stuck between a rock and a hard place because the more I spend on legal fees, the more my debts increase, the lower my borrowing capacity goes.

The way I see it is she could be mortgage free, have her income and benefits leaving her with net monthly income of c.£1,700 and I'm still paying for all the children's costs. She'll be far better off than most households, there aren't many out there that have disposable income AFTER mortgage or rent payments of £1,700 per month.

 

[Jumper85]

Also the judge at the FDR hearing stated Spousal is uncommon these days and the maximum term of spousal is typically 5yrs but in cases like my own, 2-3yrs would be considered.

 

[Jumper85]

Recent example here: https://www.bailii.org/cgi-bin/form...ery=(spousal)+AND+(periodical)+AND+(payments)

Interesting case! Biggest difference in this case is;

• The husband got the greater share of equity! roughly a 55/45 split
• The wife acquired the 2nd home with the larger mortgage and therefore spousal was ordered
• The husbands own figures suggested he could afford spousal (I mean he was earning £6,800 per month NET!) whereas mine shows I can't without it impacting my ability to obtain a home

 

[Unknown01]

Yeah, every case is different. I think the figure I really need is what your monthly net income is.

Unfortunately the court will only care about whether you are housed. They are not bothered about whether you rent or own. If you leave it up to a court, they might decide she's not getting 90% of the equity but you are paying spousal maintenance. That's the problem with final hearings, you leave the judge to decide.

 

[capa]

Earnings wise - she earns £20,000 a year (could be £25,000 if she worked full-time) and receives universal credit of about £400 per month I believe but I'm not sure whether she would still be entitled to this on receipt of the equit

She won't be, u less she can prove that the equity money is going to be used for a house purchase, if it is then UC stays intact for 6 months, if not and it's above 6k she will lose UC, There's also a figure of 16k that's used aswell but unsure what that relates to

 

[Ash]

I'm not that up on divorce finances generally but I do remember a few guys saying some years ago that if you bought a house with a big morgage, you would be deemed not to be able to afford spousal ..........Whether that is still the case I don't know. And I doubt you can do that at this stage, but I know of one case where it happened after spousal was ordered and he then applied to vary the spousal as he had this big mortgage.

The fact is both of you need to be able to afford to provide for the kids, with a 50/50 shared care order. I'm not an expert but to my mind it would either be 50/50 finanances and spousal, to be fair. Or 70/30 with limited spousal or 90/10 with no spousal. But then fair isn't always what happens is it?

Even so, the figures have to add up and I would think your argument is strong - that you also need to be able to afford to buy a house and provide for the kids half the time. Assume you've had legal advice on all this?

 

[Unknown01]

She won't be, u less she can prove that the equity money is going to be used for a house purchase, if it is then UC stays intact for 6 months, if not and it's above 6k she will lose UC, There's also a figure of 16k that's used aswell but unsure what that relates to

£6k is when you begin to lose UC and £16k when you stop receiving it all together. You lose 1% of UC for each £100 extra you have in savings (based on the assumption that this is the income you could generate from said savings).