In the last week or so, significant numbers of people have lost their main and often only source of income. Those still in work have seen their salaries cut considerably. Government help is on hand for businesses to support their staff through the furlough scheme which will pay up to 80% of salary up to a ceiling of £2,500 per month. Similar help has now been promised to the self-employed. However, there is no doubt that the impact of the Coronavirus on many household incomes is now beginning to bite.
Living expenses continue
Whilst we may be making everyday savings during the current lockdown, we all have essential living expenses whether that is our mortgage, our rent or utilities. The worry of meeting payments on these expenses and on loans and finance agreements is causing extreme pressure on households already on a tight budget.
So, when maintenance stops or is reduced, panic can set in.
Help is available in some instances
In these exceptional times, we are encouraged to be pragmatic and to co-operate with each other. The major banks are inviting customers to contact them to discuss their worries.
Many banks are offering temporary lifelines on loans and overdrafts.
Mortgage companies have been encouraged by the Government to offer short term mortgage holidays to help customers through this difficult period. It is important that you speak to the providers and where you have a joint mortgage, and try to agree a way forward with the other owner.
For those in rented accommodation, landlords are being encouraged to be flexible so it may be possible to agree a reduced rent.
The key to all of this is to communicate with the landlords, mortgage companies, banks and energy providers.
Equally important is the need to communicate with your ex
If you have maintenance obligations whether through a court order, through the Child Maintenance Service (CMS) or by way of an informal agreement, technically you should not stop paying or reduce your payments without first seeking a variation to the amount you pay.
If you fail to do this, you would find yourself in arrears and you could face enforcement action.
A variation of a maintenance order or of a CMS assessment would involve making an application to court or to the CMS for a re-assessment. Unfortunately for some, this may be the only option if an interim agreement cannot be reached. However, these applications may take time and can be costly which many of us can ill afford in the current climate.
Managing Maintenance Payments
So, whether you have an order, an assessment or an informal agreement, the first step will be to communicate with your ex.
- Explain your position and how your income has changed
- Work out what you can afford to pay: as a starting point, if, say your income has reduced by 20%, you might try to agree a 20% reduction in your maintenance
- Try to agree an amount that you can both live with.
Unless your income has stopped altogether, you should avoid stopping your maintenance payments.
If you are receiving maintenance, first of all, see what savings you can make, as outlined above. Can you manage on a reduced amount of maintenance? If your maintenance stops altogether or you simply cannot manage on your reduced income, think about State support – you may qualify for Universal Credit. Don’t delay in making your application.
Some payers will use this crisis as an excuse not to pay maintenance. However, if you receive CMS maintenance, the CMS can recover the maintenance for you. Whilst the CMS will make a deduction from the amount it recovers, you will at least have the comfort of regular maintenance payments.
If you have a court order, speak to your lawyer about an application to enforce the order. The court will expect you to have taken all reasonable steps so, before doing so, consider how you can reduce your expenses. Now, more than ever, we need to be resourceful and pragmatic.
Discuss options such as mediation to open lines of communication with your ex. We know that many people are worried and a discussion about the situation with an impartial third party may help.