At the best of times, divorces can be a little messy and drawn-out. As they seldom turn out to be amicable because of spite or differences in opinion, it’s possible that one spouse may try to get one over on the other in order to claim as much as they can from whatever matrimonial assets are at stake. Some might choose to take extreme measures just to leave the other out of pocket!
Some things during divorce proceedings can make an already complicated process even more so, one of them being bankruptcy. Whatever the causes, if one spouse is on the brink of declaring themselves bankrupt, then it’s likely to have dire consequences for all matrimonial assets, as well as the non-bankrupt spouse who may lose more than they bargained for.
In most divorce cases, the biggest asset of all is the family home. Usually shared by the formerly married couple, it’s seen as the thing that one spouse will want above everything else. If one spouse is bankrupt, then it might make sense for the family home to be transferred to the non-bankrupt spouse, but it’s not as simple as that.
Unless permission is given for that to happen, the family home will fall into the hands of the Trustee in Bankruptcy, a person who acts on behalf of all the bankrupt person’s creditors. The same goes for the majority of matrimonial assets such as cars, electrical goods and furniture. This is likely to leave non-bankrupt spouses going through divorces seething.
Less complication, fewer assets
As for non-homeowners going through divorce, the whole process of dividing up assets and paying off creditors if one spouse is about to become bankrupt will be a little quicker than usual, as there’s no major asset to divide. However, in the event of a breakdown of marriage, spouses experiencing financial difficulty may have little choice but to become bankrupt.
Given that an astonishing 77% of people who file for bankruptcy are non-homeowners, bankrupt spouses will have to tread carefully. Whatever the circumstances, doing things with care throughout the divorce process is in the best interest of everyone involved.