Bankruptcy and Divorce Proceedings
Bankruptcy and Divorce Proceedings | Middletons Solicitors | Andover Solicitors
Individual insolvencies are on the increase, probably caused by the recession. In divorce proceedings, when finances are discussed, sometimes one party will raise the issue of possible bankruptcy due to a high level of personal debt. Family lawyers need to be alive to the fact that the threat of bankruptcy is merely a negotiating tactic in the hope of achieving a more acceptable settlement. However, it is now more likely that the threat is real and in those circumstances it will have a severe impact on the resolution of a couples’ financial issues. In those circumstances the non-bankrupt spouse or civil partner feels powerless as any control over the matter disappears. A bankrupt’s trustee will take control of his property and assets for the benefit of creditors, leaving the spouse unable to make a claim other than possibly against a pension. It is important to work with the trustee to minimise the impact of the bankruptcy on the family. Recently we have been involved in a number of divorce cases involving bankruptcy or potential bankruptcy of one of the parties. It is not surprising, where say a husband has assumed a large number of family debts, that he considers bankruptcy if he also faces losing his share in the family home. He may decide that his share in the home is better used by a trustee to reduce or extinguish those debts. This potential problem should be considered by a family lawyer and steps should be taken to reduce this risk even if an overall settlement is not quite as favourable one party as he or she may have expected.
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Just a short note to once again express my sincere thanks to you, Sue and the M&U team, for all your help, cooperation and first class professional support. I am most grateful to you all.Chris Stephenson, Warminster