The Coronavirus lockdown is having a serious adverse effect upon the finances of millions. Incomes are reduced and the value of capital assets has been slashed.
But what if your finances have also been affected by a money order made by the divorce court? What if you can no longer afford to pay the money the court ordered? Or what if the money you were to receive is no longer enough? Is there anything you can do about this?
We are talking about the variation of financial orders: can the order be varied, and if so what are the criteria that the court uses to decide whether or not to vary it, and by how much?
Financial orders essentially come in two forms: capital orders and income orders. Capital orders are primarily lump-sum orders, and orders adjusting the ownership of property. The main type of income order is of course a maintenance order, whether for a spouse or a child.
The rules regarding variation of capital orders and income orders are quite different. Income orders can be varied, but capital orders are usually intended to be final.
The main exceptions regarding capital orders are lump sum orders payable by instalments and orders requiring the sale of property. However, the courts are generally reluctant to vary capital orders. For example, the variation of an order to pay a lump sum by instalments is only likely to relate to the timing of the payments. Still, this could be useful if you want to ask the court for more time to pay.
Otherwise, it is theoretically possible to ask the court to set aside a capital order (and make a different one), on the basis that events have occurred since the order was made which alter a fundamental aspect of the order. It could be argued, for example, that a significant reduction in the value of an asset due to the effect of the Coronavirus is one such event. However, setting aside orders in this way is very rare, and the general opinion is that it would be very difficult to persuade the court to order a strike out in these circumstances.
Maintenance orders, however, are commonly varied. In deciding whether to vary an order the court will have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. The circumstances of the case include any change in any of the matters to which the court was required to have regard when making the order. Accordingly, if the maintenance payer’s income has reduced significantly, then the court is likely to make a significant downward variation in the amount of the maintenance payments.
Of course, the maintenance may be varied back up if the payer’s income subsequently returns to pre-virus levels!
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As usual, the above is just a very brief outline of what can be a complex topic. If you would like to apply to vary a financial order then you should first seek the advice of an expert family lawyer. Family Law Café can put you in touch with such a lawyer – for further information, call us on 020 3904 0506, or click here, and fill in the form.
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