Bankruptcy and Family Law matters can sometimes occur simultaneously. After separation and during a divorce money can sometime get a little tight, but what happens if your Ex becomes bankrupt before final property orders have been made? How will their bankruptcy affect your interest in the marital asset pool? What does that mean? Bankruptcy is the legal declaration that a person is unable to pay their debts within a reasonable time. When a person is declared bankrupt, nearly all of their assets are placed with a bankruptcy trustee and then sold to pay the person’s debts.
When bankruptcy occurs during family law proceedings the consequences are significant and cannot be ignored. If your Ex has been made bankrupt, while this is serious, it does not mean that you will lose your entitlement to the marital asset pool or even that you will lose all of your entitlement to be maintained and supported if necessary. Amendments to the Bankruptcy Act 1966 and the Family Law Act 1975 mean that the court is still able to make property orders even though your Ex is bankrupt and the assets are currently under the control of the bankruptcy trustee. This means that if the court orders, the trustee will be prevented from selling asset off until the property matters between you and your Ex have been finalized.
If you would like to know more about how bankruptcy affects family law proceedings and your entitlements you can read about it in our article “What if my Ex Becomes Bankrupt: Bankruptcy & Family law” available on the Corney & Lind website along with many other great resources.
If you would like to speak with one of our Brisbane family lawyers about your property or parenting matters please contact one of our Business Development Officers to arrange an appointment today on 07 3252 0011.