Til tebt do us part

An increasing number of divorcing couples are going to find themselves 'joined at the wallet' for some time after their divorce is finalised. Our expert team of matrimonial law advisers explains how the current economic climate will see the end of the clean break divorce in many cases.

The most recent headlines on divorce have focussed on the likes of Madonna and Guy Ritchie, Paul McCartney and Heather Mills and Bernie Ecclestone and Slavica Ecclestone fortune. However, away from the world of celebrities, the reality is that in today's tough economic climate couples and indeed the courts are more likely to be grappling with the issue of splitting debt rather than assets.

Philip Barnsley explains; "When the housing market was booming, the arguments focussed on how to divide up the equity in the property. The tide has now turned and the prospect of negative equity is looming in some cases. This presents a situation that the courts haven't faced on a significant scale for some time".

As these cases come to the fore in 2009, we expect to see the Courts relying on previous case law, which has seen the matrimonial home transferred to one party, with the proviso that the other party will receive their share when market conditions allow.

In cases where there is still wealth to be distributed, the courts may now need to examine the distribution of risky and secure assets. Some clients may also be advised against a one-off payment in preference of periodical payments that take into account the threat of redundancy and the fluctuating stock market.

Divorce lawyers are going to have to become more creative and imaginative in the way that they construct financial settlements in times of an economic downturn. The Courts are aware of the difficulties facing those with mortgages and are already becoming more sympathetic to this issue.

For further details, please contact Philip Barnsley, a Partner in the Family team on 01384 364148.

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