LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

NSW How Do I Enforce a Binding Financial Agreement?

Discussion in 'Family Law Forum' started by TammyB, 7 November 2015.

  1. TammyB

    TammyB Member

    Joined:
    6 November 2015
    Messages:
    3
    Likes Received:
    0
    My ex and I have been separated 3 years, and signed a binding financial agreement 9 months ago. I have carried out all my obligations in the agreement but my ex has not fulfilled his. As part of the agreement, a property held in joint names, which secured his company line of credit, was to be transferred to his name only and my name was to be removed as a guarantor. He has been unable to do this as he is now not in a position to refinance the debt as the sole guarantor.

    The bank has refused to give me any information on the status of this debt over the 3 years since we separated, as my ex had me removed as a signatory on the bank account and I was not a director of his company. As per our binding financial agreement, I obtained my own loan and paid a lump sum into the line of credit.

    I contacted the bank to request that they reduce the limit on the facility accordingly, but as I had no authority on the bank account they would not speak to me. They advised they could only deal with my ex, who had no interest in reducing the credit limit. He has now run the facility back up to $190K and has no means to repay it.

    The bank has finally seen fit to make their first contact with me, in the form of a default letter and notice of intention to take legal action. They also advised that the arrears information will be passed on to a credit bureau, which will have on-going repercussions for my credit history. I accept that the property must be sold to clear the debt - I have no interest in it and that is my ex husband's loss. It is the extra interest, fees and legal charges, in addition to the black mark against my credit history, that I am concerned about.

    Does our binding financial agreement stand for nothing? How can the bank refuse me information, access and authority on a facility that they are now holding me liable for?
     
  2. AllForHer

    AllForHer Well-Known Member

    Joined:
    23 July 2014
    Messages:
    2,319
    Likes Received:
    423
    So the BFA has not been sealed by the court?
     
  3. TammyB

    TammyB Member

    Joined:
    6 November 2015
    Messages:
    3
    Likes Received:
    0
    No - my solicitor said that if we both signed the agreement, it did not have to be ratified by the courts.
     
  4. JS79

    JS79 Well-Known Member

    Joined:
    2 October 2015
    Messages:
    307
    Likes Received:
    35
    Binding Financial Agreements are legally enforceable if all of the legal requirements have been met as set out in the Family Law Act 1975.

    These legal requirements are :

    a. It must be in writing and stating what type of binding financial agreement it was;
    b. signed by all parties;
    c. each party must have their own independent legal advice;
    d. the lawyers giving that advice but sign a certificate explaining what advice they gave; and
    e. a copy of these certificates signed by each parties legal representatives must be provided to both parties.

    I would suggest contacting your family lawyer again for advice.
     
  5. TammyB

    TammyB Member

    Joined:
    6 November 2015
    Messages:
    3
    Likes Received:
    0
    Thankyou JS79... all the requirements you list were met at the time we signed.

    The problem for me is that the BFA does not appear to take any precedence over the original guarantee given to the bank years before we separated. The bank is not interested in the terms of the BFA and will only release me as a guarantor if my ex can refinance the debt in his own name. He is unable to do this now. He has developed a devastating drug addition, spent six months in gaol, lost his licence and refuses to work. I have asked him to agree to sell the block of land so that the debt can be cleared and I will abide by our BFA in that any residual funds from the sale will go solely to him, as per our agreement. But he refuses to sell it and seems prepared to just leave himself to the will of the bank and all that that entails. So it appears there is no way to enforce the BFA.

    The bank won't allow me to apply for hardship - an application can only lodged by him. They won't acknowledge the financial problems that he is facing, because he won't make contact with them.

    The Financial Services Ombudsman won't help me because the facility is not a consumer loan, but in a company name. As a guarantor, I appear to have absolutely no rights.

    I can't list the securing property for sale without my ex's signature.

    I took out a loan in my own name to pay him out, as per our BFA, and my personal borrowing capacity is at its limit. I am on a very tight budget. I work full time, earn a low income, and have supported two teenagers with no financial support from their father for almost three years. I don't have a large pool of funds to just put this in the hands of a solicitor. I don't have the financial means to service my ex's company debt... and in any case, why would I attempt to service a facility that I am not allowed any authority on, and that my ex can continue to draw to it's maximum limit as he chooses?
     

Share This Page

Loading...