Should you Delay a Property Settlement?

July 7, 2022

Following a relationship breakdown, it is not uncommon to either mutually agree to delay reaching a settlement, or for one party to unilaterally act in this manner.

There is often a misconception that you cannot finalise your property settlement until after you have finalised your divorce, and often individuals may not emotionally be ready to proceed to finalise a chapter of their lives. There is a variety of reasons why people may delay, however, in short, it is not ideal, and it is prudent to finalise your property matter as soon as possible.

Divorce Time Frames

An application for a property settlement can be made to the Federal Circuit Court and Family Court of Australia. You must commence proceedings in court (including filing Consent Orders negotiated out of court) within 12 months of your divorce.

If an application for property settlement is not filed within that time frame, the parties are required to obtain the leave (permission) of the court to be able to file their application. This can create additional expense and delay as the court needs to be satisfied that there is a legitimate reason for the delay in not commencing proceedings with respect to property settlement within the time frame set and that the party applying, or children of the marriage would suffer hardship if the application was not permitted to be heard. A court will not always grant leave to commence property proceedings out of time.

Therefore, there is no advantage until waiting for the finalisation of your divorce, and in fact this may cause significant issues and force Court proceedings that may have otherwise been unnecessary simply to protect your interest.

Added Pressures

Property matters can take a long time to determine, as consideration will be had to all assets. Determining values, division of property and potential sale of assets can cause immense stress, which may impact on all aspects of your life, particularly if there are children of the relationship. Not having a determined outcome for what your future financial life may look like can stop you from formulating or putting into place long-term arrangements for children, which can cause unnecessary disruption and anxiety.

In addition, just because you are amicable with your ex-partner immediately following separation, does not mean that you always will be. Often tensions spark when one partner re-partners, which can lead to a breakdown of an otherwise positive relationship. Working towards achieving a prompt property settlement will aim to reduce anxiety and tension, in what is undoubtedly an already stressful time. The longer you delay a property settlement, the more complicated it can become.

Other Complications

Assets for property settlement are valued as at the current date. Inheritances may be received and argued to be part of the property pool. Debts may be accrued and change the value of the pool. Essentially, “life” may happen. These are complications that may cause your property matter to become increasingly complex, and potentially more difficult to deal with. Therefore, dealing with a property settlement promptly will lessen these risk factors and aim to achieve a positive outcome that protects your interests.

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