Bankruptcy Law if Property in Joint Names?

Discussion in 'Debt and Bankruptcy Law Forum' started by Kirsty, 13 June 2014.

  1. Kirsty

    Kirsty Member

    13 June 2014
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    If your husband or wife whom you have separated from has to go through bankruptcy and all properties are in joint names and as yet had not been allocated during the split up - how does this affect you financially? Do you end up having to liquidate and get any share of the funds raised from liquidating the assets? What is the best way to protect your share of the asset base?
  2. CathL

    CathL Well-Known Member

    19 April 2014
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    Hi Kirsty,
    The Family Law Courts ‘Bankruptcy’ page sets out some good information when bankruptcy occurs (it seems to apply to your situation whener you've separated, but not yet completed your divorce and property settlement) - such as:
    The Family Court and Federal Circuit Court can deal with the bankruptcy of a party to a marriage or de facto relationship involved in certain family law proceedings. The impact on parties is complex and legal advice should be obtained as the facts of each case are different. The following can only be an overview.

    What type of proceedings are affected?

    • The Family Court and Federal Circuit Court have jurisdiction in any matter connected with, or arising out of, the bankruptcy of a party to a marriage or de facto relationship in proceedings for:
    • property settlement under Section 79 or 90SM of the Family Law Act 1975, and/or
    • declaration on interest in property under Section 78 or 90SL of the Family Law Act, and/or
    • setting aside property orders under Section 79A or 90SN of the Family Law Act, and/or
    • spouse maintenance under Section 72 of the Family Law Act,
    • de facto spouse maintenance under Section 90SE, and/or
    • enforcement of any of the above orders.
    Effect of bankruptcy on bankrupt
    Once a party to a marriage or de facto relationship which has broken down becomes bankrupt, his or her property (except some categories of assets such as most household goods, superannuation, some tools of trade and a motor vehicle up to a certain value) is immediately vested (settled) in the trustee in bankruptcy of the bankrupt (the trustee). Once this has occurred, the bankrupt party is no longer able to transfer any property or pursue any entitlement to property settlement. Only the trustee can do that.
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