For richer, for poorer…


When your marriage breaks down, you hope that, through legal intervention if necessary, the assets formally shared between you and your former partner would be equitably distributed following your separation.

In practice, this division of assets will usually include the family home. But if you only have debts to share, and your assets are in negative equity – that is, if the money owed (in the form of a mortgage for example) is more than the value of assets– what happens then?

In the case of Matthews v Matthews [2013] EWCA civ 1211 (, the couple between them owned four mortgaged flats and had a substantial amount of debt.

Both parties were self-employed. The wife was the higher earner but had primarily short term contract work where there was potential for her to be out of work for periods of time. The husband had lower paid but more regular and certain work. The judge took into account the mortgage obligations of each and their ability to pay; and ruled that the wife should own three of the flats outright and the husband should own the fourth outright, and that they would each be solely responsible for the mortgages on those respective properties.

The judge conceded that finances were going to be tough for both parties in the aftermath of the marital breakdown, both being left with a large amount of debt, and, in the wife’s case, also the additional complication of childcare commitments. However, as she had the higher potential earning capacity, and had owned two of the flats outright prior to the relationship, a greater share of the debt (and also of capital) was awarded to her.

Each case is decided on its own merits. Financial arrangements can be complex and you should consider seeking legal advice before reaching any settlement.

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