Enforcement of Financial Court Orders

Part of: Financial Settlement after Divorce

During a divorce or a separation, parties will often also negotiate a financial settlement which relates to a division of assets and finances and may need enforcement of financial court orders where a party is not fulfilling their agreement. Such financial settlements are often made through the court if they are not capable of being agreed between the separating couple. Where a couple has agreed amicably between themselves, they may get the agreement endorsed by the family court.

A court order referring to a financial settlement is also referred to as a financial remedy order. One would assume that once an order is made by the court or a consent order is endorsed by the court it will be followed in a reasonable manner and time. Given that the matter relates to finances and or property there may be some delays especially where pensions are to be transferred or a property is required to be sold. However, there will be some instances where a party to a financial remedy order may fail to comply with an order without any valid reason. Failure to comply with a court order is known as a breach of an order. In such a situation action will need to be taken to ensure the order is followed by the breaching party. This is known as an enforcement of financial court orders.

What type of financial court orders are made following a divorce or separation?

Following a divorce or settlement assets and finances are often divided or split between the separating couple. The financial remedy order can relate to property, pensions of the parties, savings, businesses, shares and even includes maintenance payments.

There are different types of orders which may follow a financial settlement which are:

• Consent order – this is an order which is usually where a couple reaches an agreement between themselves regarding the division of assets. Where a decision cannot be reached the Judge will decide on the division of assets and will make an order binding by way of a consent order.
• Clean break order – such an order ends your entitlement to make financial claim against your partner and ends their entitlement to bring any claims. A clean break order is commonly used where there are no assets, but you want to protect any future assets or inheritance and to prevent any future claims.
• Pension sharing orders – such orders are decided following an agreement to divide the pension assets at the time of a divorce. The courts are responsible for calculating the percentages of the pension sharing.
• Maintenance order – this relates to spousal maintenance which is paid to the spouse who is financially weaker or a spouse who remains without any income due to sacrificing their career for the welfare of the family.
• Lump sum orders – these provide for one spouse to provide a lump sum of money to the other spouse. This is usually in return for another asset which is taken from the matrimonial pot.
• Property adjustment order- this relates to the matrimonial home. The order will decide what will happen to the matrimonial home, which deals with the sale of the property, who will live in the property or whose name the property will be held in.

How does a breach of a financial court order or a financial settlement order take place?

A breach of a financial consent order usually takes place whereby one party fails to comply with what is required of them to satisfy the order. For example, in the case of a maintenance order, one party may fail to make the necessary spousal maintenance payments without a valid reason. Similarly with a lump sum order the paying party may fail to make the payments or may fail to meet the instalments which have been ordered by the courts to be made.

A breach of a financial court order concerning a financial settlement is a major breach and a court order should be complied with unless there is a valid reason for failing to comply. Where a genuine reason exists the party, who is likely to be in breach of the order should either relay this information to the other party or consider variation of an order where a breach is likely to take place.

What actions can I take where a breach of a financial court order has taken place?

Prior to commencing any legal action in relation to a breach of a financial court order you may want to approach your former partner to advise them of the breach. You can initially do this verbally over the telephone and follow this up in writing. It may be that there is a genuine reason for failing to apply with the financial settlement order and you may be able to reach an agreement in relation this issue. You can also use this as evidence in any court proceedings that you have acted reasonably and in a fair manner.

Where despite you raising this with your former spouse the breach continues or there is no response then you can consider seeking legal advice and proceed with legal action.

How is a breach of a financial court order reported to the court?

A breach of financial court orders is reported to the court by completing and submitting a form D11. This is an application notice for an interim order within the divorce, dissolution, or separation proceedings. You will need to complete the form stating that you think there is a beach of a financial court order. At Kabir Family Law, our divorce lawyers can assist you in completing the form and checking over your completed form to ensure you bring the enforcement of financial court orders proceedings accurately. At the same time of issuing this application to the court you will also need to serve a copy of the application to the party against whom enforcement proceedings are being commenced.

What happens when an application for a breach of financial court orders is made?

Once the court is in receipt of the application, they will have the task of considering whether there has been a breach. If the court believes a breach has taken place the court will require the person who has made the breach to make the payment which is owed as well as continue to comply with order.

What happens when the court determines there is a breach financial court order?

Where a court has determined a breach of a financial consent order has taken place the courts can enforce the order by enforcing payments. The person who has breached the order and owes money is referred to as a judgment debtor whereas the party who is owed the money is referred to as a judgement creditor. When considering enforcement of financial court orders the courts will take into consideration the type of order which needs enforcing and will also consider the financial situation of the judgement debtor.

What options does the court have when considering enforcement of financial court orders?

Where a financial settlement order has been breached by one party the court has many orders it can make in enforcing the original order. These largely depend on the type of order which has been breached.

The most common types of enforcement methods are:

• Attachment of earnings order – this type of order is commonly used where the enforcement of financial court orders relates to maintenance payments which are usually spousal maintenance. The effect of such an order is that a fixed amount of money is deducted from the judgement debtors’ earnings. The court will order the employer of the judgement debtor to deduct a fixed amount and pay it into the court for the benefit of the judgement creditor. Such an order is also useful where a lump sum payment was ordered which the judgement creditor maybe paying in instalments but has fallen into arrears with.
• Charging order – The courts usually order this where payments relate to a lump sum which the judgement debtor has failed to pay. If the judgement debtor has property, then a charge could be made against the property. It is important to note that a charging order does not provide for an immediate payment. The focus is to provide security for the payment. The debt will be paid when the asset is sold. Where a charging order is in place the courts can order the property to be sold to recover the sums owed to the judgement creditor. The courts can an order the property to be sold or the judgement creditor can make an application for an order of sale.
• A third-party debt order – this order provides for a third party who owes money to the defaulting party to pay the amount to the judgement creditor instead of the judgement debtor. Most commonly this order is used against banks who may hold monies for the judgement debtor. As well as banks the money you may be expecting from a redundancy settlement, an insurance settlement or any inheritance can be paid to the judgement creditor.
• Judgement summons – this applies to situations where maintenance or lump sum payments have not been made. The judgement debtor will be given an opportunity to explain their breach as well as provide information on their assets. The judgement debtor can also be sent to prison because of the breach.
• Warrant of execution – this is where the court directs goods of the judgement debtor to be seized. The goods will be seized by enforcement agents and will be held until the judgement creditor is paid. If need be, the goods can be sold to settle the debt of the judgement debtor.

How are enforcement of financial order orders dealt with when a payment of money is not required?

Not all financial settlement orders relate to payments. Some financial orders may state that a one spouse is to sell their home to remove the other partner from the mortgage. In this instance the spouse who has been directed to do this may fail to facilitate the sale or deny the process from being completed. The spouse who is living in the home to be sold may fail to co-operate or delay the sale. In this situation the court can:

• Force the sale of the property. The courts can direct for the occupier of the property to vacate the property to allow the sale of the property to proceed.
• Execution of documents. The court can direct that a judge signs and executes the documents required which one spouse may be reluctant to sign to allow the transfer of the home to the other spouse. This extends to other assets which require to be transferred such as stocks, shares and even pensions.
• Committal for breach of undertakings. Where an undertaking has been put in place and it is not complied with, the court has the power to fine the spouse in breach of the undertaking and or for them to be imprisoned to ensure they comply with the undertaking and the promise made.

Can a court decide against enforcement of financial court orders where a breach has taken place?

In certain circumstances the court may decide against enforcement of financial court orders and as a result the person in breach may not be asked to comply with their responsibilities. This is usually the case where the financial circumstances have changed, and it would be unreasonable to expect them to comply with a financial settlement order. This would often take place were a person has lost their job or has been made redundant and as a result the courts may decide that a more suitable course of action is to allow the payments to be stopped until the circumstances improve.

What can I do to prevent myself breaching a financial court order?

Once the court has made a financial settlement order the circumstances of one spouse who must comply with the order may change. This could either be due to the reduction of income, loss of a job, or where a property is involved, it may be due to the value of the property dramatically dropping. Such reasons may be beyond the control of one person.

You may also want to consider changing an order because circumstances of the spouse receiving maintenance may have changed, i.e., they may have found a job, their income may exceed yours or they may have commenced cohabiting with another partner and therefore it may require the order to be revisited.

In such circumstances you may want to avoid being in breach of an existing order by asking the courts to change a financial court order, this is also known as a variation of an order. By making such an order before you fall into arrears can prevent you from breaching a financial court order and protect yourself from enforcement action which could have serious implications.

Where a court is asked to vary a financial settlement order or change the order the courts will consider the individual circumstances since the initial order was made. The court has the power and discretion to make a new order. This power is provided under s.31 of the Matrimonial Causes Act 1973. If you want to avoid enforcement proceedings against you and have genuine reasons for failing to comply with an order or you believe your circumstances have changed which warrant the need to deviate from, the initial financial settlement order, then contact our family lawyers today who can advise and assist you with changing a financial court order.

Arrange a free initial consultation today with one our family lawyers today

If you are facing a situation where your former spouse is in breach of a financial settlement order our family lawyers in Nottingham as well as across our York, Newcastle, London, Oxford and other branches can help. We can assist you with the enforcement of financial court orders and guide you through the process to ensure you are in receipt of your rights which have been ordered by the court. Where you are a spouse, whose circumstances have changed due to which you are unable to meet the obligations set out in a financial settlement order then we can also assist and advise you in relation to the variation of orders to ensure enforcement proceedings are not initiated against you. We provide family law advice nationally as well as internationally through telephone, email, and Skype. We will also ensure you are kept up to date with you matter and assist you developing a strategy to help you succeed. Contact us today for a free initial consultation by calling on 0115 666 3800 to discuss your options or let us call you back. You can otherwise book a time that suits you.