What’s the Difference?

 

 

 

 

 

When a relationship dissolves, both consent orders and Binding Financial Agreement (BFA ) are legally binding methods of settling property matters. However, there are some important differences between a BFA and Consent Orders.

Key Differences between a Binding Financial Agreement (BFA ) and Consent Orders.

 

Participation in the court system

Consent Orders are only made in family court if the court deems them “just and equitable,” which means fair and reasonable.

BFAs: are contracts between parties that do not have to be approved by a court or an independent agency.

 

The Consideration of Fairness

Consent Orders must be fair and reasonable, as a court will review them to ensure they are just and equitable. The Family Court will only accept agreements that it considers fair—this acts as a safety measure against financial abuse.

BFAs: Terms don’t have to be fair. One party can have a more advantageous settlement. This is a key reason why you require independent legal advice to ensure that clients know whether the agreement is fair.

 

Legal Advice and Witnessing documents.

Consent Orders: There is no requirement for either party to obtain legal advice for Consent Orders or for an agreement to be witnessed by an external party.

BFAs: Both parties must have their own lawyer to provide independent legal advice. This is usually at an additional cost.

What can they cover?

Consent Orders: Can cover both financial or property agreements as well as parenting matters.

BFAs: Only deal with financial or property matters. – If you require parenting matters, you must also do a Consent Order.

 

Which is more enforceable?

Consent Orders: Enforced by the court through a simple enforcement process.

BFAs: Enforceable only when a court application is made. This can be an expensive and time-consuming process as the court must first establish if the agreement is enforceable.

 

Consent Order vs Binding Financial Agreement (BFA): Which is better?

 

 

When to Choose Consent Orders:

Consent Orders are a more precise and direct approach for couples with straightforward financial situations without complex assets or debts.

Consent Orders are the best option if both parties want an equitable split and want the court to review and ensure the agreement’s fairness.

For parents seeking a comprehensive solution to their parenting and property disputes, Consent Orders are the best option.

Drafting a BFA often requires both parties to seek independent legal advice, which can be expensive. Consent Orders can be more cost-effective if minimising legal fees is a priority, especially in amicable separations.

Consent Orders are more enforceable if there are concerns about the agreement’s future enforceability, especially if one party may not uphold its end of the bargain.

 

 

When to Choose a BFA:

Unfair agreements: A BFA allows for such flexibility if a couple has mutually agreed on a division that might seem unfair to outsiders – for example, one spouse might keep a larger percentage of assets as a matter of personal preference.

Clients with privacy concerns: A BFA provides a confidential way for couples to settle property matters away from the court’s scrutiny.

Clauses that may be conditional in the future: Couples can include clauses or conditions in a BFA that Consent Orders do not typically cover, such as future inheritance provisions or specific time periods.

 

Please contact our office if you have any questions about Consent Orders or about our service generally. You can book a call or send us an email about your situation