Credit-crunch-victim ex-husbands in Cheshire are flocking back to lawyers and to court in a bid to overturn or renegotiate financial divorce court settlements.
The stampede has erupted because many are finding themselves out of a job, the victims of pay cuts, in some cases in danger of their ex-wives owning 100% of the former couple’s assets due to the devaluation of investments, and in many cases unable to meet agreed maintenance payments.
“If you were considering a clean-break divorce settlement with an up-front lump sum instead of monthly spousal maintenance, then stop and think first,” said Head of SAS Daniels LLP’s family team.
“The legal position is that if income reduces, it is possible to return to court for a downward variation of monthly payments, but if a capital sum – sometimes very large – has been paid up front instead of maintenance then this cannot be recovered.
“At one extreme, normal middle-class men are re-negotiating maintenance payments because they are earning less, but at the other extreme there are some spectacular falls from wealth causing shockwaves around our most affluent postcodes.
“Cheshire is unique in the North of England in that it has such a high population of very high earners. But because many of these entrepreneurs are more attuned to opportunity, speculation and risk – which is how they have built their wealth – many that have divorced over the past few years or so have hung onto what might be considered risky assets in the belief they were a better bet than bricks and mortar.
“The net result is that ex-wives have ended up with houses, boats and cars – which retain some value – while their ex-husbands have kept stocks and shares in businesses in which they have large or controlling interests. And we have all seen what has happened to stocks and shares of late.
“House prices have fallen – but stocks and shares have in many cases been completely demolished.
“I’d say be very careful about lump-sum up-front settlements, carefully consider who gets what assets, and try to negotiate payment terms with former partners. It may extend the pain of divorce for longer than you’d want, but the alternative is finding yourself very broke indeed, especially if stocks and shares are involved – many of which have become practically worthless.
“To add insult to injury, those who made the mistake of being too generous or ambitious in their settlements are now finding that not only is there a queue to have their applications heard, but that they are having to pay more legal fees to vary deals done previously.
“A case where the husband is attempting to overturn the whole court order – due to the evaporation of all his assets – is currently being heard before the courts, and the outcome will have a huge impact upon future cases. The decision is due shortly.”
For more information contact a member of the Family team.