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Nick H
Nick H, Solicitor
Category: UK Family Law
Satisfied Customers: 115
Experience:  Ten year qualified Solicitor
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We have been married 8 years - we married in the states. My

Customer Question

We have been married 8 years - we married in the states. My wife and I jointly own an s-corp organized in CO. We are currently living in the UK (my wife is British) but I still travel to the states frequently for business activity so we are leaving the company organized there. My wife became ill and stopped working 3 years ago. She is better, but has been unwilling to return to work due to poor communication between us. He have very little business debt, but a lot of personal debt - mostly credit card debt (the majority of the cards are in my name although the debt was incurred during our marriage to meet lifestyle demands of my wife. She has a few credit cards and we have an unsecured loan in both of our names for almost $50K. Total debt is a little over $100K. She is worried about the debt creating a lien on her UK property in case we end up defaulting on our debts and has proposed that I buy her out of the business by agreeing to taking on sole responsibility for the debt. She also wants to do what she calls a "financial separation agreement" to keep her from being liable for our US debt and having it affect her UK property.
My problem is that I don't understand how it is possible to really achieve a legal financial separation except in a divorce. I've heard of a post-nuptial agreement, but my understanding is that those don't take effect until you divorce - and she says this is different from a post-nuptial.Q: Is such a financial separation agreement while still married possible? And is it binding on creditors? There is large loan to a CO credit union that is in both of our names - would our agreement prevent them from placing a lien on her UK property in case of default?I have always considered that all of my income is family income - I spend very little on personal items everything goes towards family living expenses and bills and debt repayments already. So if we did this "financial separation" I would still be spending "family money" on "my debts" instead of "our debts" - I don't see how this would stop any fighting over finances.
After so much fighting over us not being able to come to some agreement over a scenario in which she would return to work it would simplify my ability to run the business to buy her out so that I can just get on with it. But I have fears over whether or not a "buyout" between spouses would stand up in court if we divorce, which seems more and more likely the more we fight. I'm afraid that we will execute a buyout agreement now, and then later we will divorce and she will claim that she has a right to the business anyways, or that she has a right to a share of ownership of the growth since the buyout or something. I don't want to take the time or expense to negotiate an agreement and have us both hire solicitors and then not have it be binding.Q: If we divorce later will a business buyout agreement standup in court to protect my ownership of the company?
Submitted: 1 year ago.
Category: UK Family Law
Expert:  Nick H replied 1 year ago.

Hello – Firstly in terms of the Financial Separation Agreement. Yes these are valid in England and Wales, but they are not strictly enforceable. That is to say a judge can change the terms when solemnising a Consent Order. The Consent Order states the financial settlement terms on divorce. In terms of the debt. The Separation Agreement can state that you will accept responsibility for your wife’s debt, but the creditors can still pursue her for the money if you do not pay, if that debt was raised in her name. I trust that this clarifies matters. Your 5 star rating is much appreciated.

Expert:  Nick H replied 1 year ago.

Hello again - I hope that my answer has clarified matters for you.

Should you have any further questions that you would like to ask then

please do not hesitate to ask. Giving a 5 star rating ensures that I get paid.

Many thanks