Divorce Settlement - Advice Please

Thready · 11 November 2006 at 1:35PM

Good Morning Money Savers

I wonder if any of you have any legal knowledge relating to divorce.

I will try to give you all of the relevant details whilst being as brief as possible, but apologise in advance for what is bound to be a long post].

My husband and I split up following me finding out about his 2nd affair in July 2005 and under the circumstances it was fairly amicable. He left at my request and moved in with his girlfriend.

We have a mortgage [36.000] but no children [although he has an adult daughter from a previous marriage].

He walked away from his prior marriage leaving his ex the house and contents and paid maintenance [£50/week] for approx 18 months for his daughter who was 17 and in full time education at the time. Therefore I paid the deposit [£6000] and all legal fees for our home; I also paid for all the carpeting & furnishings etc.

Throughout our marriage he paid the mortgage & utility bills and I paid for the maintenance of the house, groceries, TV licence & birthday/Christmas presents and a timeshare we [foolishly] bought.

When he left I drew up a spreadsheet based on the value of the property and the equity in it [approx £120.000] then I deducted outstanding joint debts & pensions and halved it and made him an offer of £25.000 based on that, which he verbally accepted. I contacted my mortgage company and got my mortgage in place, but at the 11th hour discovered that his business bank [he’s a self employed director of his own limited company] had a charge on the mortgage and I needed him to provide and end 1 certificate to remove the charge before the mortgage could go ahead. That’s where the fun began.

Despite my contacting him monthly he never produced the end 1, always citing he was too busy etc. Spring forward now to Sept 6th this year. He came round to talk and was bemoaning the fact that with £25k he wouldn’t be able to buy anywhere else and he wanted the security of knowing he had somewhere to go if he needed it. I told him that regardless of our separation I wouldn’t see him on the street. The next morning he phoned to say that he agreed to the £25k offer and would get the end 1 the following week, but that he needed a place to stay that night!!!

So he moved back into the spare room that night. I felt that I needed some kind of agreement so typed up a statement of intent, stating that he was here on a temporary basis following the break-up of his relationship, that he would pay me a rent of £50/week, would get the end 1 cert. which would enable the transfer of the mortgage into my sole name and on completion I would pay him the agreed lump sum of £25k in full & final settlement and we both signed it [not witnessed and not legally binding].

A month later he still hadn’t got the cert. and admitted he had no intention of doing so as he wanted more money. So again, in writing I stated he was in breach of our agreement and if he didn’t get the cert by 11th Nov I wanted him to leave. He hasn’t left and hasn’t got the cert.

I went to a solicitor who wrote re-iterating my offer and today I have his solicitors reply stating that we had agreed the value of the house was £180k [which I have never agreed] and that they were looking for a settlement of £72.500.

What I need to know is whether there is any likelihood of him being awarded this by the court. Can he really be awarded £72.500, keep his pension [which his solicitors have said he is now drawing, meaning he is drawing it early], keep his business and leave me with all the debts?

My solicitor is costing me £211 an hour and will be a lot more to go to court and I am really worried about being able to afford the fees.

I’m 45, work full time, my salary is £23K I have limited savings and a pension. Have been paying the mortgage etc and am being very frugal.
He is treating the house like a hotel, hasn’t so much as washed a cup since he moved back and sits in the conservatory every evening with the air conditioning on, despite my asking him not to as I can’t afford to have it on and I am sitting in the lounge with no heating on and a blanket over my knees for warmth.

To top it all I got my redundancy notice this week and will be unemployed [obviously I am job hunting] wef 21st Dec.

Anyone know where I stand?

Prudent · 11 November 2006 at 2:34PM

I just want to send hugs because this is a horrible and unjust situation. I am afraid I can't advise you, but know you will get good advice on here.

Bossyboots · 11 November 2006 at 3:12PM

There are two many complications in this to give any advice. Your own solicitor who has all the facts and figures is the only one who can really do this. Your mistake was being too kind hearted and letting him back in. I would pack his stuff back up and put it out on the street. He clearly has no respect for you as evidenced by the way he is treating the house. I have to wonder whether this "split" with his new partner was a ruse to get back into the house.

On a positive note, your savings can be classed as an "item in dispute" in terms of the divorce. Therefore, depending on your finances and redundancy settlement, you could qualify for legal aid and maybe you need to consider whether just at the moment looking for another job is the best thing to do. I hate to encourage someone not to work, but as a temporary measure you may be put into an advantageous position by claiming benefits and thus legal aid. It is all down to your finances though and I could help a bit more on this if you explain what redundancy package you are expecting.

Thready · 11 November 2006 at 3:53PM

Thanks Bossy

Redundancy package is bog standard weeks salary per completed years service, a little over £2000 so not a whole lot.

I did consider not busting a gut on job search, but as this could drag on for a long time I can't afford to risk being unable to pay the mortgage.

There is a possibility of a redeployment with my current employers, but it would entail a 160 mile daily round trip, so would be extremely expensive in fuel plus the mileage and wear and tear on my car.

Company wouldn't be offering a redeployment package, just the job, owing to it being a voluntary org with charity status and there are 27 staff hit by the redundancy, so offering redeployment packages isn't a financial option for them.

I strongly suspect OH has been 'hiding' money away but cannot prove it, I am also convinced that drawing his pension early is because of the proceedings, but am not sure how its an advantage other than the pension fund is obviously not now being contributed to and therefore not growing

loftus · 11 November 2006 at 11:19PM

A few questions Thready.

1) How long have you been married?
2) Is the house in joint names?
3) You have offered him £25k. The equity is £120k. What is the value of debts and what is the value of each of your pensions? Are there any other assets of the marriage?

Sorry for the intrusive nature of the questions but it is difficult to understand the situation without more knowledge of your position.

Thready · 11 November 2006 at 11:33PM

Not intrusive at all, I expected to have to divulge info to get answers.

1) How long have you been married? 17 years
2) Is the house in joint names? Yes
3) You have offered him £25k. The equity is £120k. What is the value of debts and what is the value of each of your pensions? Are there any other assets of the marriage? No other assets, my pension about 10K, his in Oct '05 was £40K, debts other than mortgage approx 10K, timeshare [worthless] in joint names still being paid for [by me] at £96 per month x 10 years and will not be paid for until 2009

loftus · 12 November 2006 at 12:44AM

I'm not an expert by any means but belong to an online divorce support group and have just been through a - reasonably - amicable divorce myself. From this POV this is my take on your situation - and I really sympathise with you too although I am trying to be as realistic as possible.

First its a long marriage and this tends to negate the fact of who brought what in.
Secondly if the house is in joint names, I believe that until you have reached a settlement he is legally entitled to stay unless you feel there is some threat of violence or abuse. His solicitor will probably be advising him to do this.
I presume he gets the figure of £72.5k from "his" valuation of the house. If this is in dispute you may have to get a couple of independent valuations done to try and establish one acceptable to you both - or a judge if it gets that far. Even if his valuation is correct he can't expect to walk away with half the equity before any liabilities are taken into consideration.
Taking your figure of £120k equity, less £10k debts equal assets of £110k - so disregarding everything else that gives a maximum of £55k.
The pensions dont tend to be considered pound for pound - I think it tends to be arond 25%-30% of their value - so this would be worth maybe another £7k to you if they go into the pot. They would give you a £58.5k - £51.5k split.
The timeshare is tricky - never come across this before. Presumably this is in joint names too? Are you really stuck with no chance of selling it - even at a loss - rather than paying the £11.5k it will cost you over the next 10 years?
The only thing I can think of is, if you are commited to paying it, is to deduct it from the assest pot as a joint debt. But how you then sort out who owns it - God knows.
This would leave you with an approx £53k - £46k split - his verbal agreement of the £25k offer carries no weight I am afraid.
Sorry if this isn't great news, and I am happy to stand corrected by people who know better than I do. I hope you can negotiate a better situation than that. If you would like the address of the divorce group - where there are lots of people more expert than me - let me know and I'll PM you the url.

EDITED TO SAY- I didn't notice that you had written up an agreement - but as you say would be difficult to make it stick. Until your finances are sorted by way of a stamped Consent Order its all up for negotiation.

hobo28 · 12 November 2006 at 2:14AM

Based on what you've said and what loftus has pointed out, i'd be interested to know how you worked out the £25k as a reasonable figure?

Bossyboots · 12 November 2006 at 10:05AM

loftus has made some good points and I don't think there is anything I would disagree with.

In respect of the timeshare, I think the suggestion that it is sold, even at a loss, is a good one on the face of it. This will get it out of the way and enable a clean break. If you cannot sell it, then some agreement will need to be drawn up in relation to it and the costs taken into account.

All the debts accumulated from the marriage should be deducted from the equity as well and then, realistically, the remaining equity should be split 50/50. I really cannot see a court agreeing that you should recover your capital input before the equity is divided after all this time.

Thready · 12 November 2006 at 11:20AM

Thanks Loftus for your advice it is much appreciated.

I was under the impression that we were entitled to 50% of each others pension.

The timeshare is worthless, we have had this confirmed and I can't see anyway of getting out of paying for it. I have deducted 50%of the final cost of it from his half of the equity.

He also [verbally] agreed to my recouping my initial deposit on the house, his solicitor has acknowledged this payment. I also have from his solicitors an acknowledgement that he is jointly and severaly liable for £10k debt and have therefore deducted another 5k.

My calcs were based on 120K equity therefore his starting figure being 60K, less 50% of pension, 50% of timeshare, 100% of deposit, 50% of debt, there was something else but I can't remember just what [I took all financial documents to work 'just in case' so I can't refer to them for the accurate breakdown].

No one has mentioned his business at all, does that mean that it is disregarded?

Bossyboots · 12 November 2006 at 11:37AM

You have said you have your own pension, so you will not be entitled to half of his. The principle of pension sharing is that while one person is building up their pension, that money is being diverted from the family home and more often than not, the other party has a reduced pension because they have worked less hours to care for the home and children and thus disadvantaged their own pension position.

In your case, you have been contributing to your own fund. Therefore, pension sharing will not necessarily be applicable. In any event, you cannot simply deduct what you perceive as your share of his pension from the equity in the property. While offset can sometimes be used, the normal practice is for funds to be released from the pension for you to invest into a separate pension scheme. You should therefore not be using the figure you have in this respect as an item to set against his equity at this stage.

As already stated, it is unlikely that you are entitled to set off the original deposit although if his solicitors have already accepted that, then are lucky. However, they are very likely to use this against you in the pension negotiations so it will not come without attempted clawback.

Does his business have a monetary value? At some stage in the negotiations he will need to produce his accounts. If the company has value then this can be considered as well. Presumably the company is rented premises, rather than owning them but if that is not the case, then there would be some financial interests there to be taken into account.

The only person who can answer all the questions as they relate to you is your own solicitor who has all the facts and figures. If your husband is drawing his pension, did he take a lump sum? Where is that money? There is just so much to this situation that only someone with the actual details can advise on what is a good settlement, but it certainly seems on the face of it that 25k is too low a sum to be paying to your ex.

Divorce Settlement - Advice Please

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