Bankruptcy & Insolvency
Separation and bankruptcy often coincide, or one may follow the other. The Family Law Act and the Bankruptcy Act allow disputes which involve both pieces of legislation to be decided together in the Federal Circuit and Family Court of Australia.
Our approach varies depending upon who we act for, but we have particular expertise in acting for the spouse of the bankrupt and the spouse of the party who may become bankrupt. We try to ensure that the settlement will withstand a challenge by a trustee in bankruptcy and claims by the bankrupt spouse once the bankruptcy ends.
At a glance
- Bankruptcy and family law issues can be dealt with together.
- Settlements can be challenged by a trustee in bankruptcy.
- Timing and strategy matter.
- We act for spouses, trustees in bankruptcy, receivers and liquidators.
Our expertise and approach
Many of these cases never reach the courts. We aim to negotiate a settlement and formalise the arrangements in such a way that court challenges and expensive litigation are avoided.
We act for trustees in bankruptcy, receivers, liquidators and non-bankrupt spouses in family law matters.
We can help guide you through the inter-relationship of bankruptcy law, family law and insolvency, and assist you to decide on the correct strategy, the most appropriate court and the best time to act.
More information
For more information go to:
Contact us
Email: enquiries@fortefamilylawyers.com.au
Phone: +61 3 9248 5800
Related Publications
The Micawber principles: When bankruptcy and Family Law Collide
1. Introduction Why is this paper called “The Micawber principles”? Mr Micawber, in Charles Dickens’ David Copperfield is the eternal optimist. His famous phrase “Something will turn up” is probably reflective of why many people end up bankrupt. Judge Driver, in a...
Bankruptcy, financial agreements and the rights of creditors
The Full Court of the Family Court of Australia in Grainger & Bloomfield[1] considered the standing of a creditor to apply to set aside a financial agreement after the debtor spouse became a bankrupt. Shortly prior to the bankruptcy, the bankrupt spouse...
The rights of trustees in bankruptcy and s 75(2)(ha)
Trustees in bankruptcy are often pessimistic about how they will fare in proceedings under s 79 Family Law Act 1975 ("FLA"). The recent case of Grainger & Bloomfield[1] is likely to increase this pessimism. The impact of s 75(2) in the determination of claims...
FAQs
My husband is going bankrupt. Can his trustee in bankruptcy go after me? We settled property matters a year ago with a consent order.
In some circumstances the trustee can try to undo your property settlement. The fact that you settled property matters with a consent order may make it easier for the trustee to attack the settlement than after a contested order. It will be a red flag.
It will depend upon several factors:
- Did the property settlement mean that your husband could not pay his debts?
- Were the orders made in open court by a Judge or Senior Judicial Registrar?
- Were the orders made in chambers after filing an Application for Consent Orders?
- Were your husband’s creditors given notice of the proposed settlement?
- Did you benefit from your husband’s non-payment of debts? For example, if you retained the home, was the home or the mortgage paid for in part by your husband not paying tax?
- Was the property settlement just and equitable?
My wife may go bankrupt. Is there anything I can do to protect my assets?
Yes, the first thing you should do is get expert legal advice on your rights and entitlements. We can advise you about:
- the assets which will be more likely to be attacked;
- whether you will be considered to have any responsibility for your wife’s debts;
- the best way to formalise your property settlement; and
- steps to take to protect your assets and your position overall.
My husband is bankrupt. Will he still have to pay child support?
Yes. He will have to pay ongoing child support and any child support debt owing will still be payable by your husband despite the bankruptcy. You can recover the child support without having to lodge a claim with the trustee in bankruptcy. Of course, whether you can recover the child support will depend upon whether your husband is earning an income.
Take the next step
If you’re dealing with bankruptcy, insolvency or a property settlement that may be affected by either one, we can help you work out the right strategy and timing.