It sounds as, if part, you’ve become a victim of the credit crunch. You’ve tried to be very fair to your wife and daughter, but maybe the time has come to hammer out a proper separation agreement and a divorce.
You don’t mention any formal separation agreement, so it may well have been done informally. Even in this instance, you should have informed the benefits office, if you or your wife were receiving benefits, as well as HMRC (applicable only if there are tax credits involved), and the local council (for council tax purposes, council tax benefit or housing benefit).
At this point, a formal separation agreement would be useful for you. It lays out what your financial obligations are in terms of child support for your daughter and maintenance for your wife. You’ve been very generous, but obviously you can’t sustain that. If you can work out the details between you beforehand, then it will reduce your solicitor costs when you have it all set out legally.
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Try our Child Maintenance Calculator free, here on this site →However, the two of you might also consider going directly for a divorce if there’s no chance of reconciliation. The more you can agree between you in advance, the smoother the process and the lower the cost of the lawyers (see our article Divorce: Your Action Plan for more information). You will obviously need to provide Child Support Payments, but this will be far less than you’re paying out now.
Will you have to pay maintenance to your wife? There’s a very good chance that you will, but with good negotiation it should be that you’ll end up paying out quite a bit less than the current 50% of your net salary. Your wife is obviously eligible for a disability allowance, and after divorce might well qualify for housing benefit.
The amounts, though, are something yet to be worked out, preferably amicably between the two of you, or possibly between the lawyers or mandated by the court at the time of divorce. How long you might have to pay maintenance depends on the circumstances, although if your wife re-married it would definitely end. There’s also the possibility of negotiation that gives your wife a greater share in your house in return for lower maintenance payments.
If you have a pension through work, you also need to be aware of pension sharing, which will be affected by all this.
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