I have a financial order following divorce, but my ex won’t pay. What next?
So, you have been through the divorce, and have a final order from the court for financial relief. The order includes provision for maintenance, transfer of the matrimonial home and a lump sum. But, your ex is refusing to pay and won’t sign the papers to transfer the house to you. What can you do?
A family financial order is one which applies between spouses on divorce for financial provision for things like living expenses and housing requirements. When the paying party (or ‘debtor’) fails to comply, it can mean significant financial hardship for the recipient (or ‘creditor’).
How do I enforce the order?
The current provisions approach enforcing the order against a debtor from two perspectives, namely:
Target the debtor’s assets; or
Put pressure on the debtor to pay
The 6 principle methods
1. Ask the court to enforce the order on behalf of the creditor: It used to be the case that a creditor could apply to the Magistrates court for an order registering a maintenance order for collection and enforcement. However, the creation of the single Family Court has now rendered that method obsolete, in favour of a lesser known power to order payment of the periodical payments into the Family Court. If payments are not made, then the creditor asks the court to pursue enforcement. This method only applies to collection and enforcement of periodical payments.
2. Third Party debt orders: these are orders made against a third party, such as a bank to pay money that is owed to the debtor, but to pay it direct to the creditor
3. Attachment of earnings orders: these apply to the debtor’s employer, and require them to pay the creditor before paying the debtors salary.
4. Charging orders: these give the creditor the right to be paid from a capital asset owned by the debtor – but only when the debtor disposes of that asset, although a creditor can apply for an order for sale of the asset charged.
5. Court execution of documents – The court has power to execute documents on behalf of an un-cooperative debtor.
6. Judgment summons – an application to imprison the debtor for lack of payment
These 6 methods are not without difficulty however. A third party debt order will not normally apply to a joint account. They do not act as a monthly or regular payment mechanism, thereby requiring a creditor to apply repeatedly if there are repeated breaches of an order. They also require the creditor to know who owes the debtor money, not something that is always readily apparent.
If the debtor changes employer, then the attachment of earnings order does not automatically follow the debtor to the new employer.
There are limits to what can be subjected to a Charging Order. Only land, funds in court and certain securities including Government stock, shares, and units in unit trusts are presently chargeable. The charge must be registered to be effective, without which an innocent third party purchaser without notice could take without being subject to the charge.
A court execution can only apply to orders where a debtor cannot be found or has refused to sign a document that he/she has been ordered to sign in the first place.
With a judgment summons, the burden of proof is a criminal one, i.e. beyond reasonable doubt. A creditor must prove the debtor can pay but is refusing to do so. The burden of proof is a high obstacle for most creditors to satisfy.
Under the Family Procedure and Civil Procedure Rules, the general rule on costs in enforcement proceedings is that the court may ‘make any costs orders that it thinks just’. However, rarely is the creditor in a position to know if the debtor is able to meet any costs awarded, over and above the original order to be enforced. There is no guarantee of a costs order even if successful.
There is a consultation underway by the Law Commission which aims to improve methods of enforcement. It is consulting on better ways to make debtors pay and comply with financial orders in family cases. Details of the consultation can be found here. The Commission is considering additional methods such as a range of ‘coercive orders’, including orders disqualifying the debtor from driving, disqualifying the debtor from foreign travel; and curfew orders.
The Law Commission is also looking at whether more can be done at the time of making the original order, and what alternatives could there be to court action, such as mediation. The full range of ideas is contained in the Consultation Paper and the consultation period runs until 11 July 2015.
If you have a financial remedy order that is not being met by your ex, and you would like advice on enforcing the order please feel free to contact us at Paradigm Family Law on 0845 6020422 or email [email protected] to arrange a free initial consultation.