While insolvency is unlikely to be an issue to worry Sir Paul McCartney and Heather Mills, divorce is a topic of major interest to Insolvency Practitioners!
Recent surveys have shown that divorce is the most common factor in the lives of people with debt problems. Divorce is often the main cause of insolvency of the individual or the family business. But often the opposite is also true. The family business, typically the only source of income, may have to fund two homes at a time when family disagreements effect its efficient operation. Couples only talk openly about money problems when they become insurmountable.
My top 5 tips for managing your finances through a divorce are:
- Minimise the impact of the divorce on the business, otherwise both sides lose out;
- Be sensible when agreeing a value for the business, good profits do not always mean a high value;
- CSA contributions and family court settlements have to be paid, they cannot be written off or compromised in any formal insolvency process;
- Keep talking and try to reach an amicable settlement to avoid higher than normal professional costs;
- Close off joint debts properly as soon as possible, both parties remain fully liable for joint debts until closed down.
With increasing divorce and personal insolvency rates, we can expect Insolvency Practitioners to continue to have an interest in this field, long after McCartney/Mills divorce is consigned to history.