Should I Choose A Binding Financial Agreement Or A Consent Order?

Should I Choose A Binding Financial Agreement Or A Consent Order?

This article looks at the factors to consider when deciding between a Binding Financial Agreement and Consent Orders, offering insights to help individuals make informed choices.

Understanding Binding Financial Agreements (BFA)

A Binding Financial Agreement is a legally binding contract outlining the agreed-upon division of assets and liabilities without requiring court approval. One advantage of a BFA lies in its flexibility; parties can tailor agreements to their preferences without strictly adhering to the just and equitable criteria mandated for Consent Orders.

Advantages of a BFA:

• Autonomy in crafting personalised arrangements.
• Expedited preparation and execution compared to Consent Orders.
• No court involvement or approval is necessary.

Disadvantages of a BFA:

• It can be overturned, especially if not properly drafted.
• Potential for increased costs due to the requirement for independent legal advice.

Understanding Consent Orders

Consent Orders involve mutually agreed-upon court orders submitted for approval under Family Law Act sections 79 and 90SM. Once approved, these orders conclusively terminate the financial relationship between the parties.

Advantages of Consent Orders:

• Legally binding and enforceable once sealed by the court.
• There is no mandatory requirement for independent legal advice.
• Greater resilience against being overturned compared to BFAs.
• Can address various issues, including parenting matters.

Disadvantages of Consent Orders:

• Requires comprehensive disclosure of financial and parenting arrangements.
• Filing fees and variable waiting times for court approval.
• Does not finalise spousal maintenance obligations.

Factors to Consider When Choosing

Flexibility vs. Rigidity:

• A BFA may be preferable if flexibility and the ability to create unique arrangements are essential.
• If adherence to court-approved standards and a more structured approach is preferred, Consent Orders may be the better option.

Enforceability:

• Consent Orders offer a higher level of enforceability through court intervention in case of breaches.
• A properly drafted BFA can also provide enforceability but is generally more prone to being challenged.

Speed and Efficiency:

• BFAs can be quicker to prepare and execute, making them suitable for those seeking a swift resolution.
• Consent Orders involve a court approval process, potentially extending the timeline.

Cost Considerations:

• While Consent Orders may involve filing fees, there is the potential for increased legal costs with BFAs. BFAs require that each party obtain independent legal advice.

Conclusion

Ultimately, the choice between a Binding Financial Agreement and Consent Orders depends on the unique circumstances of each case. Seeking professional legal advice is crucial to navigating this decision effectively. Whether opting for the flexibility of a BFA or the structured approach of Consent Orders, individuals can confidently secure their property settlements in Australia by understanding each option’s advantages and disadvantages.

If you and your ex-partner have agreed on a settlement or need assistance in reaching and documenting your agreement, our family lawyers and mediators can help. Arora Legal offers a range of fixed-fee legal and mediation services.

NEXT STEPS

Arora Legal offers a range of fixed-fee legal and mediation services.  To find out how we can help you, BOOK your free 15-minute consult today or call 07 3180 0129 and speak to our specialist lawyer.  By contacting us today, you can take the first step towards resolving your family law issue and moving on to a brighter future.