The recent rise in “Buy Now, Pay Later” services such as Zip Pay and Afterpay are a hot topic in the retail and finance sectors but they are also causing a stir in many Family Law practice circles.

Communication, financial problems and “trust issues” are significant factors that contribute to couples wanting to divorce in Australia.

If overspending and debt is a concern you have raised with your partner and it has fallen on deaf ears, then it may be time to think a bit harder about what the ramifications could be if you do split.

In Australian Family Law property settlements, generally, all existing property will be considered as part of a pool to be divided. That also includes debts (in most cases).

The Courts have developed a general approach to debt that as at the date of the trial, they will pool unsecured liabilities (such as, credit cards, unpaid bills, taxes and personal loans such as Buy Now Pay Later types) and secured liabilities (such as mortgages, car loans etc) and will deduct these from the value of your assets to reach a net asset figure.

So, if you are a saver and your partner spends to the very last penny (or pennies they don’t even have), this could have a significantly adverse impact on your future.

As a first step to getting your relationship and joint budget back on track, we recommend planning and discussion in key.

ASICs Money Smart online planner is a great tool to sit down together and work out where your money is going and agreeing on what your respective priorities are, as a family. The link to Money Smart is below:

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner

If you feel as though it has simply gone too far, speaking to an experienced Family Lawyer, may help you understand whether there is an ability to challenge, discount partially or completely disregard your personal contribution to the debts incurred by your partner.

The key to success is getting legal advice early.

Early planning can help you to get your ducks in a row if you choose to end the relationship.  Some areas we can help (or partner with other professionals, such as financial planners) are:

• Assisting you to understand all possible assets and liabilities;

• Whether you are able to close off joint accounts and if so, how to go about it;

• Assisting you to understand the importance of critical dates and recording them if necessary.

• Whether you are able to cancel any redraw facilities and if so, how you should go about this;

• Whether you are able to update rental agreement and other contracts that may impact or have relevance in your relationship;

• Securing property that form part of the asset pool and taking preventative action to minimise the risk of losing them or their value being diminished;

• Whether you can obtain information about assets in your partners name, including business or trust assets and if so, how to bets go about it.

Lagom Family Law have a strong track record in achieving excellent results for our clients in property settlements to achieve their financial freedom should they choose to end their relationship. We do this by providing tailored advice to you.

Call or fill out our contact form today to organise a free initial discovery call.

Author: Lichee Hogland, Principal Lawyer & Director

Lagom is Swedish and means not too little, not too much, just right. This is our philosophy of practice as we aim to provide tailored advice specific for your individual needs - that’s just right for you!

Lagom Family Law is a boutique legal practice lead by Principal Lichee Hogland who strives to achieve the best possible outcome for her clients whilst being approachable and respectful.