As reported in The Times and elsewhere today, a recent High Court decision could have huge implications for divorce settlements where there is the possibility of one spouse being made bankrupt. Previously, it was thought that it would be extremely difficult for a trustee in bankruptcy to have a divorce financial order set aside if it had been made in genuinely contested proceedings. However, Judge Pelling QC has ruled that such orders can be set aside, so that the trustee can utilise assets that the court ordered to be transferred from the bankrupt spouse to the other spouse, to pay the bankrupt's debts.
The Times states that "the decision is predicted to affect at least 20 per cent of the 120,000 people expected to file for bankruptcy this year", but its implications go even further than that, with the possibility of trustees seeking to set aside orders made within the last five years.
Expect this case to fill many column inches in forthcoming legal periodicals.
Thursday, May 10, 2007
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I think the hidden danger is with this case getting some publicity (naturally) how many spouses will now purposefully make themselves bankrupt just to see the other party suffer. Some do it anyway (I've got a shining example of a case in this regard at the moment) but this just makes it easier for them.
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