Divorce and Finances: What happens after you have reached a financial agreement with your spouse?

Divorce and Finances: What happens after you have reached a financial agreement with your spouse?

Reaching an agreement following separation or divorce is often a significant milestone. Many couples are able to resolve matters amicably between themselves through direct discussions, mediation or negotiation between solicitors. However, many people are unsure what happens next and how you are able to make an agreement legally binding.

This is when a consent order or a clean break order becomes essential.

What is a consent order?

A consent order is a court order which becomes legally binding once it has been approved by the court. The document records the financial agreement reached between separating spouses or civil partners. A consent order is made up of three main sections:

Recitals – these are agreements that have been reached between the couple that don’t necessarily need to be ordered by the court but recorded for transparency.

Undertakings – these are promises made to the court that the agreements won’t be breached and they have severe consequences if they are breached.

Orders – these are agreements ordered by the court, usually concerning property and financial assets such as pensions and businesses.

Once approved, a consent order can be enforced and the order offers separating couples protection, meaning their former spouse cannot make any further claims against their finances or assets.

What is a clean break order?

A clean break order is often referred to where there are no assets to divide but is essential to ensure the financial ties are severed in the future. The clean break order makes it clear that neither person will make a financial claim against the other in the future. 

What happens when you instruct us?

When clients approach us, we carefully review the proposed terms to ensure they protect our client’s interests and make sure that everything has been considered in the agreement reached. We then draft the agreement for your approval and send it to your spouse for their signature before sending it to court for the Judge’s approval.

Our process typically includes the following steps:

Understanding the background

Even when the agreement appears straightforward, context matters. The court must be satisfied that the order is fair in all circumstances taking into account various factors such as the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, financial needs, the standard of living enjoyed by the family before the breakdown of the marriage, the age of each party to the marriage and the duration of the marriage; any physical or mental disability of either of the parties to the marriage; the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; and the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it. This criteria is set out in Section 25 of the Matrimonial Causes Act 1973 and you will often hear us refer to this.

Reviewing the financial disclosure

Before drafting the consent order, we will need to understand the financial position of both parties.

Both parties will be provided a statement of information (D81) for completion which includes aspects such as property valuations, savings and investments, pensions and debts/liabilities. 

The court expects both parties to provide full and frank disclosure before entering into a binding agreement.

If disclosure has not taken place, we may advise that further information is required before the order is finalised. This can be carried out by way of full disclosure in a Form E and can be exchanged between solicitors or we can exchange the information directly with your former partner to satisfy the requirement of giving financial disclosure to one another.

Drafting the consent order

Once we are satisfied that the agreement is appropriate, we will prepare the consent order itself. The agreement you have reached may not be considered fair by the Judge and therefore we will advise you of this once we have all of the necessary information.

Once both parties approve the draft order and sign the relevant documents, we submit the application to the court for approval by a Judge.

The Judge will review the paperwork and decide whether the agreement appears fair and reasonable. If approved, the consent order becomes legally binding. If the Judge does not approve the order, the agreement will need to be revisited.

A practical and supportive approach

Our approach is focused on helping clients formalise agreements smoothly while ensuring their legal position is properly protected.

Whether your agreement has been reached through mediation, direct discussions or solicitor negotiations, we can guide you through the process of turning your agreement into a legally binding consent order.

 

If you would like advice about preparing a consent order or reviewing an existing financial agreement, our family law team are here to help.

Email Head of Family Law Rebecca.Cresswell@sweeneymiller.co.uk or call 0345 900 5401.

 

 

Newcastle

Bulman House,
Regent Centre,
Henry Street,
Gosforth,
Newcastle Upon Tyne,
NE3 3LS
0191 284 2743

Sunderland

Sweeney Miller House,
Riverbank Road,
Sunderland,
SR5 3JJ
0191 567 8371

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