Bankruptcy in divorce
Kate Butler and Judith Buckland explain how bankruptcy impacts on divorce settlements and the importance of taking advice.
Dave Harries (Communicate TV): One of things that I think we often assume about divorce settlements of course is that there is a pot of money there that is kind of available to be divided up, or assets what have you. Presumably there must be cases where, for example bankruptcy, what happens then?
Kate Butler: The difficulty when you are bankrupt is a trustee will be appointed who will then effectively own all of your assets so you are no longer in possession of any assets to be divided. If you are in the middle of a divorce at that stage, then it can be a real problem because the Court doesn’t have jurisdiction to get involved and make decisions in the way that they normally would do. This is something where you really will need to have some specialist advice and it could cause a real problem.
Judith Buckland: If there is any possibility of bankruptcy within divorce proceedings it is really important to see lawyers as quickly as possible because there are some things that we can do in order to try and minimise the damage of bankruptcy. I will be honest with you, it is difficult, but there are steps that can be taken and it is important to discuss them with a lawyer.