The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:
For family lawyers and divorcing parties, the impact of bankruptcy can have a dramatic affect on divorce proceedings and can (in the right circumstances) mean that the family court has no jurisdiction to deal with any financial relief applications (including property adjustment applications). This impact has been subject to a number of cases in both the bankruptcy and family courts. Unfortunately, it is not uncommon for bankruptcy proceedings to be in existence at the same time that divorce proceedings are ongoing and concurrent proceedings can create conflict when it comes to the division of assets.
Whereas the family court will look to make an order on the assets (known as a property adjustment order) taking into account, amongst other things, the future needs of the parties and the children, the bankruptcy court will look to divide the assets on a real property basis, with the creditors' needs at the forefront. This potential conflict needs to be carefully considered and the timing of when the bankruptcy proceedings were opened compared to when the property adjustment order was made will be the main consideration. For family lawyers and divorcing parties, this impact needs to be carefully considered and worked through to ensure any potential damage is limited (including wasting costs and the court's time).
This Note sets out some useful tips on what steps should
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