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What is a financial order on divorce and dissolution?

Learn what a financial order is, what it can cover and if you'll need to go to court.

Many people fail to appreciate that there are two distinct elements to a divorce. 

First, the divorce proceedings themselves which now occur online. 

Secondly, and perhaps more importantly, the financial element, dealing with the separation of your finances. 

Guidance given to couples considering divorce or dissolution on the government website does refer to the need to obtain a financial order but the importance of this is not stressed nearly enough and little explanation is provided as to what a financial order is. We explore below the main things you need to know about financial orders.

What is a financial order?

A financial order sets out how assets will be divided upon a divorce or dissolution in a legally binding document. This agreement may have been reached by agreement or through court proceedings. With either method, the order must be sealed (approved) by a judge. Once it has been approved, it is very difficult to change the agreement or bring a new claim, as explained further below.

What can a financial order cover?

A financial order can be uniquely tailored to suit your individual circumstances and can cover any of the following:

  • Transfer of a property
  • Sale of a property
  • Lump sum payment
  • Pension sharing
  • Maintenance payments
  • Payment of school fees

What is a consent order?

If you have been able to reach an agreement with your partner, you can apply for a consent order rather than making an application for financial remedy proceedings. The orders are largely similar however attendance at court is not required when filing a consent order.

What happens if we can’t agree?

If you are unable to agree matters by consent, either through talking to your partner, mediation or negotiation through solicitors, you will need to make an application for a financial order. You can apply for a financial order as soon as you have started your divorce or dissolution proceedings. This is done using a Form A, which will then begin financial remedy proceedings. 

What happens if court proceedings are needed?

Once your Form A has been issued, the court will provide a timetable with various directions and a date for the first hearing, known as the First Appointment. 

Financial remedy proceedings are a three-stage process and it is not until the final hearing that a financial order will be made. At the final hearing, the judge will consider the following factors before making a financial order:

  1. Income, earning capacity, property and financial resources of each party
  2. Financial needs, obligations and responsibilities of each party
  3. Standard of living during the marriage
  4. The age of each party and duration of the marriage
  5. Any physical or mental disability of either party
  6. Contributions from each party
  7. Conduct of each party
  8. Any benefits the parties would lose the chance of acquiring by reason of divorce or dissolution

Why do I need a court order?

It is important to ensure that a financial order is obtained for two main reasons. 

First, an agreement must be embodied within an order for it to be enforceable, as discussed below in more detail. Without this, it can be difficult to hold an ex-partner to an agreement reached. 

Secondly, it your claims are not formally dealt with in an order which includes a clause recording all future claims are dismissed, your ex-partner may be able to bring a claim against you in the future, even many years after the divorce or dissolution has been finalised. The only exception to this is that if your ex-partner remarries, their claims will end. 

When can I apply for an order?

In order for any financial order to be sealed by a judge, you must have reached a certain stage within the divorce or dissolution proceedings. Depending on whether the divorce or dissolution proceedings were instigated before or after April 2022, you must have reached either decree nisi or conditional order, the mid-stage of your divorce.

Enforcement of a financial order

If the other party fails to comply with the terms of a court order, enforcement proceedings can be issued to force compliance. There are a number of enforcement options available depending on the situation, as follows:

Attachment of earnings

An attachment of earnings order provides that a proportion of a party’s earnings are deducted by their employer and paid directly to you.

Third party debt order

Sums that are held on behalf of a party, for example in a bank account, can be frozen and used to pay any lump sums outstanding.

Charging order

A charge is placed over land, such as a property, securities or certain other assets.  When the asset is sold, the funds will then be paid to you.

Writ or warrant of control

An enforcement officer is directed to take control and sell the debtor’s goods and the proceeds of sale are paid to you.

Variation of a financial order

Not all orders can be varied. The following orders are capable of variation:

  • Periodical payments
  • Lump sums by instalments
  • Provision for children either by way of periodical payments or lump sum by instalments
  • Deferred lump sums
  • Sale of property
  • Pension sharing order (providing the application is made before Final Order or Decree. Absolute is obtained in relation to the divorce proceedings and before the order takes effect)

The court has a broad discretion in a variation application and the first consideration will be the welfare of any children under the age of 18. The court will then consider any change in circumstances, in addition to the factors set out above at a-h. Without a significant change in circumstances, it can be difficult to succeed with a variation application and evidence justifying the variation must be provided.

For further information on financial orders on divorce or dissolution, contact our divorce finance lawyers.