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What is a Settlement?
When a marriage or relationship breaks down, the financial settlement is the process of dividing property, finances, debts and other assets accrued during the marriage.
Negotiating a settlement
For couples without any property or assets, reaching a settlement can be fairly straightforward. For couples with property, debts and other assets in both their names, reaching a settlement can be much more complicated.
Negotiating a settlement with your former partner that both of you can live with is likely to save you a lot of money, time and stress.
Advantages of reaching a settlement agreement
Ideally, couples would amicably agree to divide the property and finances. In this instance, a settlement agreement will be prepared. This can be done by way of ‘application for consent orders’ or a ‘financial agreement’
Reaching a settlement agreement has many advantages, such as:
- Freedom to make your own decisions
- Reduced financial (and emotional) costs
- Likelihood of an amicable relationship following agreement
- Saving time
- You know exactly what you are going to get rather than facing court, where there is an uncertainty, as the judicial officer decides for you
How to settle
- After separation you negotiate a settlement.
- Successful negotiation leads to an Agreement (Financial or Child Support) or to Consent Orders (financial and children’s matters).
- These are then ‘registered’ in the Family Courts (or exclude the courts from becoming involved)
- The matter is finalised
When to start negotiating a settlement
You can start negotiating a property settlement from the moment you separate.
Consider the following:
- The sooner you start, the more likely you are to reach an agreement with your former partner.
- Discussions between the two of you are a lot cheaper than an argument conducted by lawyers.
- The more you spend on lawyers, the less you will have to divide between yourselves.
- It is better to compromise early – sometimes even settling for less than you thought was the worst possible scenario – rather than see even more of your assets frittered away in legal fees and court costs.
If you and your former partner are already in agreement, or are close to reaching an agreement, lawyers can help you get settlements done in a legal way without going to court.
If you think you could reach an agreement but emotions are running high or there are a few things that you can’t figure out together, you may wish to consider mediation or engaging a lawyer to help you find new ways of resolving the situation.
Getting matters settled by negotiated agreement is almost always in everybody’s best interests. It may be hard (as emotions are raw after a separation) but, if it can be achieved, the outcome is likely to be much better than the alternatives.
Going to court or settling out of court
If a settlement agreement can’t be reached, you will need to apply to the court for a court order. If you decide to seek a court order or make a settlement out of court, your solicitor will advise you of the best course of action for your individual circumstances. Before anything is decided, you will need to go through all your finances and property with your solicitor.
If possible, it is best to stay out of court and to sort things out between you.
Settling will be quicker, easier and cheaper and probably get you closer to what you want than a court decision will.