27th February 2021

A natural consequence of the Covid pandemic is inevitable a rise in bankruptcies and divorces and the two don’t mix well

The impact of insolvency shortly before, during or shortly after a divorce can cause confusion over ownership of the assets of the bankrupt

When a person is made bankrupt their assets vest in the Trustee in Bankruptcy appointed by the court

Timing of the Bankruptcy Petition is crucial. If it is during the divorce then the settlement is at risk.

Generally, if a Property (Transfer) Order has been ordered by the court before a Bankruptcy Petition has been presented, then the Trustee in Bankruptcy is bound by it.

If it is after the Bankruptcy Petition is presented but before the Bankruptcy Order is made then an application to the bankruptcy court is necessary to validate the Property Transfer Order.

However, it is unlikely this application will be successful If the Bankruptcy Order has been made then the Trustee in Bankruptcy will deal with the assets of the bankrupt in place of the bankrupt or their solicitor


1. It can be shown the bankrupt made themselves bankrupt to defeat the divorce proceedings

2. The Trustee in bankruptcy can challenge a financial order and apply to have it overturned

3. Lump sums ordered and paid but not received by the non-bankrupt party

4. Pensions, which don't vest in the Trustee in Bankruptcy 

5. Maintenance payments can be varied

Red flags - people carrying a lot of debt which may affect the type of financial order agreed to in the divorce proceedings.

This article is intended for information purposes only and is based on current legislation, which is subject to change.

Legal advice specific to your individual circumstances should always be sought.

If you are affected by any of the above or are worried you may be, then please get in touch



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