In property settlement proceedings, parties are required to exchange ‘full and frank financial disclosure’ to each other. This means disclosing all assets, liabilities, superannuation and income that you have or had during the relationship. Once full financial disclosure has been given, a balance sheet can be completed with all of the assets and liabilities, which will assist the parties in how the asset pool can be divided.
What is financial disclosure?
Under the new Federal Circuit and Family Court Rules 2021, each party must exchange their financial documents for the parties to negotiate a just and equitable settlement. This means providing documents such as your bank statements, loan or credit card statements including ownership of properties or cars. This enables the parties to fully understand where each person stands financially, so a fair division of
the asset pool can be made for both parties. It also allows parties to identify if a person is hiding or disposing of assets without their ex-partner’s knowledge.
How do I provide financial disclosure?
Our Sydney divorce lawyers will advise you what documents are required for financial disclosure so that you can begin compiling them in readiness for when divorce/property settlement proceedings can commence. Often trying to obtain financial disclosure documents or if the other person does not produce them on time, can delay the process, but having them ready and prepared beforehand can help make the process much more manageable and less overwhelming.
What are the penalties for not providing disclosure?
If you fail to disclose all your assets and liabilities, not only will you be at a severe disadvantage during the proceedings, but the court may impose penalties against you. These may include a ruling for you to pay the legal costs for the other party and the court may refuse to hear your evidence of the case such as an undefended hearing. Further to this, your credibility before the court may diminish, which could adversely affect your result. In extreme circumstances, your case or application may be dismissed in full or partly or issue a fine for contempt of court.
If you are looking to begin the divorce or property settlement process but you aren’t sure where to begin or what is involved, our Sydney divorce lawyers provide free 15 minute consultations, to provide you with an outline of what your divorce proceedings may look like and what you will need to do, including how and when you will need to provide financial disclosure. Call our divorce lawyers now on 02 4626 5335 to book your consultation.