family law

Money, Bills & Who Pays The Mortgage After Separation?

Sionea Breust |

26 June, 2023

who pays the mortgage after separation

Table of Contents

When a couple separate there can be confusion or assumptions made about who should be paying for what.

So, how do you figure out when separated, who pays what for expenses like household bills, insurances and expenses relating to your children?

What should be considered when determining who pays the mortgage after separation, or other debts?

We’re going to make it clear so you know what is involved in effectively managing expenses upon separation. This information is specific to people in Australia going through the separation process.

Before any decision making should be made, the very first step is for you both to establish a clear picture of your existing financial responsibilities.

1. Document Financial Responsibilities

To feel confident about any decisions made about who should pay what, you must start by documenting all of your expenses and financial obligations. Below are three categories that can help you get this process started.

Household Bills & Expenses

Some common household expenses include:

  • Rates
  • Electricity
  • Gas
  • Water
  • Phone & Internet
  • Home insurance
  • Life insurance
  • Private health insurance
  • Car insurance
  • Car registration
  • Car maintenance

Current Debt

Compile a list of your current debts that require payment now or into the future. Some of these may include:

  • Mortgage
  • Car loans
  • Personal loans
  • Investment loans
  • Interest free loans (electrical, whitegoods, furniture etc)
  • Phone repayments

Current Expenses Relating to Children

Write down all of the expenses relating to your children that are current or typical expenses. Importantly, keep in mind that child support is often not sufficient as it does not cover all of the expenses for children. Some of these include:

  • School related fees & expenses
  • Medical prescriptions or equipment
  • Specialist appointments (E.g. Speech therapist, Ophthalmologist, Paediatrician etc)
  • Sport/music/recreational activities

Write down all of your expenses that fit into these categories. Also, list any other expenses that don’t fit into these categories.

To make the process of identifying your current expenses easier for you to document, we’ve created a downloadable Expenses Spreadsheet. You can add in your bills and expenses to get a picture of where you both stand in terms of your financial obligations.

To get a comprehensive picture, we recommend looking through bank statements for at least the last two years to help you identify all of the historical expenses. Access the editable Expenses Spreadsheet here.

2. Consider How Expenses Could Be Managed

Importantly, being spiteful or not paying bills and expenses when you could, or not assisting to ensure these expenses can be met, can reflect poorly on you if your matter needs to go to Court. So too is ignoring these obligations or claiming that you did not know. Family Law is known as a discretionary area of the law, meaning that a Judge can exercise their judgement when making decisions, taking into account the specific circumstances of that matter.

Generally speaking, if you can afford to continue to pay these expenses, you should. That being said, when one person moves out and there is suddenly the additional expense of running a second household, that may not be possible.

Mortgage Payments

If you have a joint loan, this means you are jointly liable for the payments. That being said, if one person’s name is on the loan and you have historically both contributed to paying that loan, then that should continue as before until an agreement is reached.

While continuing to pay the mortgage may not be manageable to do now that you’re separated, this is where some plans need to be established about who should pay for what in the short term. Hoping that the other person will pay is not a strategy to employ. A family lawyer can help you negotiate some short term arrangements that can help reduce your risks.

As you will know, the consequences of not paying the mortgage for example, even if you are the person who has moved out of the property and no longer have the benefit of living there, can be far reaching.

Not only may your credit score be affected, but as explained above, refusing to pay these expenses during this timeframe can reflect poorly on your character, particularly if you had previously contributed in that way.

Non-Payment Risks

If one or both of you fail to pay your financial obligations, then you run the risk of outcomes like these:

  • Disconnection or suspension of services (phone, electricity, gas etc)
  • Exposing yourself to additional risk (e.g. civil litigation from a car accident where you are at fault and do not have insurance/s up to date)
  • Additional fees for late or non-payment
  • Credit score issues – affecting your capacity to open accounts or obtain a loan in the future

Determining how to pay expenses in the short term, if a longer term arrangement cannot yet be reached, is important as one person’s failure to pay can impact the other. This is why we recommend people see a family lawyer early to ensure that you are protecting yourself early on. This advice helps people understand what needs to be put in place and get peace of mind.

Male holding a calculator in one hand and receipts in the other. Relating to this topic about who pays the mortgage after separation.

Short Term Expense Management

In Australia, many utilities providers and insurance companies offer short-term support for people experiencing short term financial hardship. This is inclusive of people going through separation or divorce as it is recognised that this change in circumstances affects people’s ability to manage the financial adjustments involved in running two households on the same income as was previously one household.

So, reach out to your lenders, utilities and insurance providers to learn what avenues may be available to you. Be proactive to determine what you may be able to do in the short term to relieve stress and financial pressure.

Payments may be able to be temporarily put on hold or a payment plan may be another avenue available.

In other instances, you may be eligible for short term assistance by way of rebates. This is available for emergency circumstances for people experiencing a short term financial crisis.

If your ex cannot be contacted or doesn’t agree to requesting this support, in Australia you are entitled to request a financial hardship arrangement independently.

3. Consider Key Timeframes

In Australia, family law dictates some important timelines to be aware of. If you have been in a de facto relationship, you have two years from the date of separation to finalise your financial settlement (also known as a property settlement). If you have been married, you have one year from the date your divorce has been granted (a divorce can only be applied for 1 year after the date of separation).

This illustrates how easy the timelines for people to financially separate can expand considerably. This is why reaching an agreement is important. And not just an informal agreement either. You each need legal advice before formalising the agreement with what are known as Consent Orders or a Binding Financial Agreement.

If you create an agreement between yourselves and it is not done in the correct way, then there is the opportunity for people to revisit the property settlement again and request a revised arrangement. Formalising this with the assistance of an experienced family lawyer is therefore essential if you want to ensure your agreement is final and you are free to move on with your life. You want to avoid the risk of your ex coming back for a second round of negotiations about what they are entitled to.

Until an agreement can be reached between you and your ex about how your asset pool and liabilities will be split (or a Court makes the decision for you), all expenses need to continue to be managed, even if one person is no longer accessing that asset.

From the date of your separation until the date your property settlement is finalised, there needs to be some temporary plans (often referred to as interim arrangements) so there is an agreed plan for how your finances are to be managed during this time.

It can take considerable time to reach an agreement about your property division because you each will be managing a lot as you go through the separation process. Especially if you end up having to go through the Court system.

Importantly, it can take anywhere from months through to years to finalise your finances with your ex. Given that, neither of you should have to face the additional problems that can arise from unpaid bills or unmet financial obligations, you need to get a plan in place that your family lawyer would tell you is wise in your circumstances.

4. Seek The Right Advice Early

When looking to determine anything relating to your finances, including negotiations about who pays the mortgage after separation, start by seeking advice from people who help people manage situations like this, every day.

We recommend speaking to a financial advisor. They have the skills and knowledge to help you determine what options are available to you and can help you achieve your financial goals. Their insights and advice about budgeting, your ability and capacity for refinancing if required, amongst other important considerations, will give you clarity and confidence about any decision making you have ahead of you.

Any decisions you make should be made with professional advice. You don’t want to agree to something with your ex now, only to have to backpedal later on because your advisors recommend a different approach.

Changing agreed plans is one of the ways we see conflict and stress escalate between people going through even the most amicable of separations. It is also a contributing factor to how people end up in Court, despite their best intentions to avoid it.

Seeking advice early will help you make the right decisions for you from the very start. If you have already begun negotiations with your ex, seek legal advice so you know where you stand. We can often give our clients tips for how to approach challenging conversations or negotiations, or do that on your behalf if that is your preference.

Finally, don’t forget to start by documenting all of your current expenses. This is the very first step in this process. You can download the spreadsheet here.

Have you recently separated or are you considering separation? 

Do you have concerns or questions that you need answers to?

We can help you wherever you are based in Sydney. We have two office locations – Penrith & Blacktown – as well as phone and online consultations if preferred. Reach out to our team on 02 47 222 050.



Disclaimer: The content in this article provides general information however it does not substitute legal advice or opinion. Information is best used in conjunction with legal advice from an experienced member of our team.

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