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Negotiating Finances in Divorce During the Coronavirus Pandemic

on Thursday, 14 May 2020.

The pandemic has sent financial shockwaves throughout the world. For those who are negotiating their finances on separation, the current climate may pose some challenges.

We explore some key points separating couples may want to consider in their negotiations.

Are Financial Negotiations Possible During the Pandemic?

Yes, however there are likely to be some challenges along the way that will require careful consideration. We have highlighted some of these below.

Whether you and your spouse have agreed a proposed settlement, or whether you would like advice on how to approach negotiations during this time, our expert solicitors will assist you. We can take instructions over the phone, video or email and can give you the guidance you need to consider your options. Be assured that solicitors, mediators and the court are all operating remotely.

Where Do I Start?

The first step in reaching a settlement is to exchange details about your finances with your spouse. This stage, known as financial disclosure,  is usually done on a Form E and requires you to provide detailed information about your assets, liabilities, pensions and income.

Financial Uncertainty

Financial effects as a result of the coronavirus (COVID-19) pandemic are being widely felt and in relation to divorce, it is presenting significant challenges when it comes to valuing assets. We actively encourage parties to seek independent financial advice and the impact of the current economic climate on your finances is something you must be aware of during negotiations.

Whilst all valuations are just a snapshot in time and as a result one party can sometimes end up better or worse off than the other, the changes currently being experienced are more dramatic than the usual fluctuations. The value of shares and investments are likely to have decreased, the property market is uncertain and income may be unknown for those who are self-employed or facing potential job losses.

Furthermore, coming to an agreement about the family home is likely to be challenging. Valuations are currently not being carried out in person and those who will need to buy a new property should be aware that their mortgage capacity will have changed. Many banks have raised the amount of deposit required for new mortgage application to up to 40% (at the time of writing), and this will undoubtedly affect your negotiations.

Whilst the future of the economy is uncertain, separating spouses will need to carefully consider the timing of obtaining valuations of their assets. Valuers will be able to provide further advice on this.

If you already have obtained valuations, some may consider obtaining up to date valuations, whilst others may seek to delay this.

Coronavirus Legal Advice

Separation Agreements

Some spouses may be confident that the current market will not affect their financial negotiations. If this is the case, you should seek legal and financial advice and look to finalise the settlement.

However, some separating couples may decide that they want to enter into a Separation Agreement instead of formalising a settlement. A Separation Agreement sets out who will issue formal divorce proceedings and when. It will typically include provision for who will pay the bills, what will happen with the home, bank accounts and investments and can detail arrangements for childcare.

Separation Agreements are not legally binding but they are highly persuasive with the courts, providing various criteria are met. Therefore, negotiating any agreement should be taken seriously and you should seek legal advice before signing anything. When the time is right, these agreements can then form the basis of a formal financial settlement in a Consent Order that is approved by the court. However, if the value of assets or either spouses' income does change significantly before a Consent Order is filed with the court, further negotiations may be necessary to ensure that both parties' needs are met and the settlement is still considered 'fair' by the court.

We do not recommend that any asset with substantial value, e.g. equity in the family home, is transferred prior to lodging a Consent Order with the court.

My Settlement Doesn’t Seem Fair Anymore

In some very limited circumstances, a party may apply to the court to vary their financial order - we have reported on this further in our article on the challenges of divorce settlements during the coronavirus pandemic.


If you would like advice on negotiating finances and to discuss your options further, we are able to offer telephone or video conferencing appointments. Please contact Samantha Hickman on 07464 544828, or complete the form below.

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