The impact bankruptcy and divorce proceedings have on one another 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 while divorce proceedings are ongoing and concurrent proceedings can create conflict when it comes to the division of assets and the knock-on effect for the divorce proceedings.
In addition, there are instances of bankruptcy proceedings being commenced with the dominant intention of frustrating the divorce proceedings. The three main issues for bankruptcy proceedings and the effect they can have on financial remedy (formerly ancillary relief) applications are:
what is the general position of each court when there are concurrent bankruptcy and divorce proceedings?
what powers does the court have to set aside bankruptcy proceedings if they were commenced to defeat the divorce proceedings?
can the bankruptcy court unwind financial remedy orders (including property adjustment orders)?
If a bankruptcy petition is presented, or a bankruptcy order is made, before the family...
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