The Importance of Securing a Financial Settlement in Divorce: A Step-by-Step Guide

The Importance of Securing a Financial Settlement in Divorce: A Step-by-Step Guide

When going through a divorce, one of the most critical aspects to resolve is the financial settlement. While many couples manage to agree on how to divide their assets without involving the courts, it is essential to make this agreement legally binding through a Financial Order. This process not only protects both parties but also provides clarity for the future.

A Financial Order ensures that both parties' financial interests are secured and that no further claims can be made after the divorce. However, not all couples find it easy to agree on a financial settlement, and in such cases, the court will step in to decide for them.

How to Make a Financial Settlement Legally Binding

For those fortunate enough to reach a mutual agreement on asset division, the next step is to have a solicitor draft a Consent Order. A consent order is a legally binding document that outlines the financial settlement between both parties. Both spouses must sign this document, which is then sent to the court along with a completed Form A (Notice of intention to apply for a Financial Order) and Form D81 (a Statement of Financial Circumstances), accompanied by a court administration fee of £53.

Once approved by the court, the Consent Order finalises the financial settlement, ensuring that no further claims can be made by either party. This provides certainty and peace of mind for both spouses as they move forward after the divorce.

What Happens When You Cannot Agree on a Financial Settlement?

In situations where a couple cannot agree on how to divide their assets, the court will have to step in and decide for them. The financial settlement process generally follows 10 steps, and an agreement can be made at any point during this journey. If a settlement is reached, it is formalised in a legally binding Court Order.

Here is a step-by-step overview of the process:

1. Providing Notice of Application – Form A

The financial settlement process begins when one party submits Form A, which signals the intention to apply for a Financial Order. This form outlines the type of Financial Order being sought and provides details about the couple and their legal representatives, as well as any prior mediation attempts.

2. First Directions Appointment (FDA) Date

After submitting Form A, the court will set a date for the First Directions Appointment (FDA). This court Hearing (often held by video conference) is an opportunity for the Judge to assess what information is needed to resolve the financial dispute and encourage both parties to reach an agreement if possible. If an agreement cannot be reached, the Judge will make Directions about what further information and documents are required to be provided by the parties and a further Hearing will be scheduled.

3. Submitting Financial Statements – Form E

Both parties must submit Form E (Financial Statement) at least 5 weeks before the FDA Hearing. This document provides a complete overview of each party’s financial situation, including income, assets, liabilities, and future financial needs. Both parties must disclose their financial circumstances honestly, as this forms the basis for the settlement.

4. Filing FDA Documents

2 weeks before the FDA, both parties submit:

●      A concise Statement of Issues

●      A timeline of events (Chronology)

●      A Questionnaire to address the Statement of Issues

●      Form G, which indicates whether the FDA meeting can also serve as a Financial Dispute Resolution (FDR) Appointment

5. Costs – Form H

Each party submits Form H to the court just before the FDA meeting, detailing the costs they have incurred during the financial remedy proceedings. This ensures that both parties are transparent about their expenses during the divorce process.

6. FDA Court Hearing

During the FDA Hearing, the Judge reviews the financial disclosures and determines if more information and documents are needed. At this stage, the Judge may encourage a resolution meeting, though if no agreement is reached, a Financial Dispute Resolution (FDR) Hearing will be scheduled.

7. File Proposals

Both parties will answer Questionnaires, submit evidence, and propose a financial settlement to the court. They will also file a second Form H to provide an updated list of costs incurred.

8. FDR Hearing

The FDR Hearing focuses on negotiating a financial settlement, with the Judge facilitating the process. Many couples reach a settlement at this stage or shortly afterward. However, if no agreement is reached, the Judge will schedule a Final Hearing.

9. Further Proposals

Negotiations continue, with both parties submitting revised settlement proposals to the court and to each other.

10. Final Hearing

If an agreement has still not been reached, the case proceeds to a Final Hearing. A new Judge will review the updated costs submitted in Form H1 and impose a financial settlement based on the evidence provided by both parties by making a Financial Order.

Conclusion

Reaching a financial settlement is a crucial milestone in any divorce. While some couples manage to settle their financial matters without court intervention, many require the court’s help to ensure a fair division of assets. The steps outlined above provide a clear framework for the financial remedy process, helping couples move toward a resolution.

By following these steps and seeking professional legal advice, you can ensure a fair and legally binding outcome, giving you peace of mind and helping you build a brighter future post-divorce.

If you require specialist expertise in securing a financial settlement, contact our experienced team at Parachute Law. We can guide you through every step of the process and ensure that your financial interests are protected.