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Ask an expert: 'I can't afford my divorce settlements, what can I do?'

A broken wedding ring with pound signs
A broken wedding ring with pound signs

I got divorced last year and have been paying maintenance to both my former partner and our two children since. It was a relatively amicable separation and, as I was self-employed and earning well, I had enough to support myself and my family.

Since the pandemic started my work has halved and, because I was a company director being paid by dividends, I have not been able to claim any Government support.

My savings have been depleted after splitting it with my ex-wife, getting a new flat big enough for my children and covering my expenses since March. I have recently applied for Universal Credit as my savings fell below the £16,000 threshold.

I have maintained my payments to my family throughout as my children are the most important thing in the world to me and I would not have them go without for one second. But I am really on the edge. I have bills and a mortgage to pay and feel I will be less able to provide for my family in future if I fall into a debt spiral now. Can I cut back how much I pay in maintenance?

LM, Preston, Lancashire

Sarah Hutchinson, family partner at Farrer & Co LLP, says:

Covid-19’s impact on the economy has been significant and far-reaching. Britain's economy is down in the dumps and the end of the furlough scheme on the horizon, concerns over job security and family finances are amplified.

If your financial circumstances have changed in light of the pandemic, then there are a range of steps you can take to make sure everything is sustainable.

Child maintenance

If you and the other parent have an informal agreement regarding child maintenance, then first discuss the issue with them and try to agree a change – either permanently or temporarily – depending on your situation. You simply need to record what has been agreed and begin paying the new sum.

However, if you are not able to agree, then one of you will need to make an application to the Child Maintenance Service (CMS). |It will calculate what should be paid based on gross income and the division of the children's overnight stays. If you are already paying child maintenance as per a CMS assessment, then they will adjust their calculation if your income has changed by 25pc. It's worth contacting the CMS and discussing the changes to your income with them.

Divorce statistics
Divorce statistics

If you can no longer afford the child maintenance agreed in a pre-pandemic court order, then it is worth approaching the other parent to try to agree a temporary alternative sum with them. If they agree, it will need to be set out in a formal court order to vary the original sum.

If they don’t agree and your original order is at least 12 months old, you can apply to the CMS for an assessment which will then override the court order.

Spousal maintenance

If you can no longer afford to pay the maintenance  to your former spouse, as per a court order, then is cannot be changed unless the court amends it, so it’s important not to make any unilateral changes. Again, the first step is to speak to your former spouse.

If you are able to agree a reduction with them, then that can be drawn up into a formal court order that varies the original sum. Where this is not possible, you will need to apply to the court for a variation.

It is, however, worth noting that this is neither a quick or cheap process and therefore – if the reduction is either small or likely to be temporary – rushing to court may not be the best option.