Help desperately needed - divorce matter, H being very tricky about finances..

[chippychippybangbang]

We've had a mediation session where he declared his financial position - apparently the business we own has very little equity in there, and the house likewise. He earns a good salary from another job, and this would be enough to pay good maintenance.

The issue is, because he's tied up all our equity by borrowing against the business and house to grow it over time, if we go for a clean break at this stage, there is no money to give me. The business turnover is £500k but H is suggesting my stake is worth 15k, for example. He's offering about 10k from the house.

His income is into 6 figures per year, but without any realisable assets I'm stuck if I want to buy a house in the short term. I'm sure he's hiding money and fiddling the figures all over the place - can anyone advise please as I'm panicking..

First of all stick with mediation a little while to give it every chance of working and to avoid unnecessary legal bills. If you think he is hiding assets be wary of chasing a pot of gold that doesn't exist. It happens a lot more than people think.

If the business has little or no capital value income is likely to be shared. Every case depends on the particular facts and in one case (V v V) after a long marriage the equity in the house was shared 50:50 and spouse maintenance was set at 40% of the husband's income.

Any children, their ages and how many nights they spend with each parent as well as how long you were married, how much equity there is in the house and local house prices are relevant.

If you don't reach agreement at mediation you will at least have an idea of what can be agreed and what issues are in dispute and that will save money on solicitor's letters. In court proceedings you need evidence of any non disclosure.

I think you are entitled to ask for his last set of audited accounts?

My friend has done this when her DH declared he had no cash. She knew he had money becuase they shared an accountant and before the split she used to go and get his books audited for him.

Thankyou both, I don't think there's a pot of gold there, more some creative accounting which is presenting the worst possible case of our finances. I think he's trying to frighten me into settling for a low figure.

I liked the mediator very much, he seemed very fair, and I could tell he was dubious of what H was suggesting so I'll go back if that's the best way of getting it sorted.

I think I need to accept it will be impossible to have a clean break at this stage - in order to pay me a fair share of the business (which is anticipated to be worth £800k and debt free within the next 8 years) it might need to be a longer pay out.

Migsie, he is in finance, so accounts are his thing - unfortunately!

At this stage disclosure is entirely voluntary. If a court application is made the court requires full and frank disclosure. There are many legitimate ways of businesses avoiding paying tax (as opposed to tax evasion which is illegal) which can make a business less valuable on paper.

So if we agree something through mediation, and it turns out H has falsified or distorted all the financial info, what happens then? Am I shafted? I know he has no moral scruples at all about trying to pull a fast one (he told me from the outset I won't be riding on the back of him from now on - lovely man that he is.)

Do I need to make a court application simply to ensure he does tell the truth? He would be in a lot of trouble professionally if he falsifies anything at this stage. And does making the application mean we actually have to go to court?

Thanks so much, I really appreciate your help!!

Mediation only really is effective if both parties trust the other and is a great alternative than fighting ridiculous issues such as who will get the furniture.

So, could you work out all the other issues out other than finances? Such as contact, schools, holidays?

Any agreement in mediation won't necessarily be legally binding, but could form the basis of a legal agreement. For instance, if you are happy with the agreement, then your solicitor could use it to form the agreement.

However, as you aren't happy and think your ex DH isn't being honest, then seems to me that you will need full financial disclosure and the penalties should any submission be found to be false. To do this, you need a solicitor, however doesn't mean that other issues can't be agreed in mediation and use a solicitor for the financial side only. Fairly common for people to get territorial about money during a divorce.

When you can agree at mediation your solicitor can draft the agreement into a "consent order" which is submitted to court along with a simplified disclosure (Form D81). If subsequently evidence comes to light there wasn't a full disclosure and it makes a substantial difference you can ask the judge to set aside the order and order your husband to pay all the legal costs. In these cases the costs are not insignificant.

However, if at the time of the settlement there is evidence you had doubts and didn't pursue them an application to set aside the order wouldn't succeed. It's therefore important to ensure that you obtain disclosure as complete as possible before settling.

Sometimes the only way to do that is by applying for ancillary relief and both parties are expected to complete a full disclosure (Form E) and a questionnaire with any queries about each other's Form E for the first hearing. The judge then directs which questions need to be answered, what else is required to assist the judge in decision making and sets a timetable for the case to proceed.

Having said that complete disclosure can be very difficult, time-consuming, costly and give rise to major disputes with impacts on the wider family. It is often necessary to make a judgment on what more information can be ascertained, and at what cost and over what period of time and at what benefit to an improved settlement. Most cases settle during proceedings.

Thankyou both. At the outset my solicitor said he felt a forensic accountant may be required, but was happy that I try and sort as many things through mediation. Everything bar finances is easily sortable that way, so I'll get as far as I can and then pass it over to my solicitor. He has extensive financial experience so I'm hoping he'll know what to be on to with H.

Also just found out H has booked a month of leave with OW, costing thousands later this year. Am unsure what, if anything I can do about this, but very concerned for a) time away from dc's for him, he will have no leave left to take with them, and b) the cost!!

I have to say I've only come across a few cases when forensic accountants have actually been required. When a case goes to a final hearing a legal team can demonstrate inconsistencies in the disclosure and based on what has been disclosed estimates the true worth. Because there is evidence of non disclosure the judge infers the value to be that of the estimate and makes a ruling accordingly.

Such judgments cannot be appealed and someone who doesn't adhere to court procedures causing unneccessary hearings can be penalized with a costs order to pay the other sides legal costs as well as their own.

Thanks STIDW, that's really helpful.

Is there anything I can do about the leave booked? He claims we have no money but has spent 5-6k on this holiday and seems to be attacking the joint assets at a rate of knots. Is that just beyond my control because he earns the salary atm?

When there is evidence that someone is disposing of substantial assets to prevent a spouse's claim to financial provision the courts can freeze all their accounts and in certain circumstances (eg transferring property to a family member) set aside a disposal.

Smaller amounts can be accounted for by offsetting the money spent against other assets and adjusting the settlement accordingly. However, taking a holiday is perfectly reasonable and if someone has the income for an expensive holiday then it will be seen as normal spending.

Thankyou so much karma, only just seen this!

I think spousal maintenance is definitely on the cards, he has left me right in the lurch with 2 v young dc's, one with health issues.

The latest trick is that he's cutting off all bar basic funding to me, to try and prevent me from being able to pay my solicitor's fees. I pay on a monthly basis at the moment, and have limited savings to dip into. I know this is a scare tactic, but if the bills start running into thousands, what can I do?

I have a great solicitor, and want to stay with him as he specialises in tricky finance people, but he doesn't do legal aid..

It is feasible to borrow money specifically for paying legal fees which can be paid back from the settlement. These schemes aren't as available as they were a few years ago though. Alternatively a bank loan can serve the same purpose.

Also it is possible to apply to courts for maintenance until a final settlement is reached and include solicitors costs, or, if there are savings you can receive an advance on the final settlement.

Speak to your solicitor to find out if any of these are appropriate and cost effective for you.

Hi there

It is very difficult to hide money from the court these days. Mediation can often work well but can be costly. Sometimes one has to consider whether that money would be better spent on court proceedings if H is more likely to co operate under a court order. The current disclosure given at mediation can still be used in many ways. Good luck!

Best regards

Harjit Sarang