The High Court has issued a ruling recently which could affect divorced and divorcing couples where one of the couple becomes insolvent. The ruling means that where a bankrupt has settled assets in a divorce within the previous five years, the trustee in bankruptcy will be able to pursue the non-bankrupt spouse.
The case is bad news for divorcees whose assets may now be subject to attack and is a complete reversal of the previous position, which safeguarded assets awarded to the non-bankrupt spouse by the court in a contested divorce. The very threat of instituting bankruptcy proceedings may also alter the negotiations between divorcing spouses.
If you are divorcing someone, or have divorced someone within the last five years, and your spouse has been made bankrupt or is likely to be made bankrupt, take advice now.
