Family Law And Bankruptcy: Does One Affect The Other?

  1. Ascertaining the parties’ property by considering their legal and equitable interests in property and their liabilities.
  2. Determining whether it is just and equitable to make an order altering the parties’ “existing interests” both legal and equitable.
  3. If it is found just and equitable to alter the parties interest, assessing the parties’ financial and non-financial contributions.
  4. Ascertain if, after considering the above, it is necessary to make an adjustment for the future needs of the parties, taking into account matters set out in section 75(2).
  5. Finally, determining what orders it should make which will be just and equitable.
  1. The court to be mindful of the likely impact of proposed orders upon a creditor’s rights, taking into account their legitimate interests, and ensure that they are reasonably necessary, or reasonably appropriate and adapt, to effect a just and equitable division of property between the parties.
  2. Whether a party’s conduct has been designed to reduce, minimise the value or worth of the matrimonial assets or whether a party has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect which has reduced or minimised their value.
  3. The non-bankrupt party’s knowledge of events leading up to the other party’s bankruptcy including considerations such as the nature of degree of the non-bankrupt party’s involvement and their benefit from or contribution to the bankruptcy.
  4. When and how the relevant debt was incurred.
  5. The factual circumstances surrounding the commencement or continuation of property settlement proceedings such as whether:
  • the relationship has broken down and the parties have separated;
  • property settlement proceedings appear to be strategic or tactical to reduce the assets available to the trustee or creditor.
  1. Whether the creditor knew or ought to have known of a potential claim by the non-bankrupt party.
  2. If and in what manner the creditor pressed or pursued their rights regarding payment of the debt.
  3. Whether by words or conduct, the creditor or trustee led or permitted the non-bankrupt party to for a reasonable view that the debt would not be pursued or enforced.
  4. Whether by words of conduct, the non-bankrupt party led or permitted the creditor or trustee to form a reasonable view that their actual or potential entitlements under the Family Law Act would not be pursued or enforced.
  5. If either of the parties failed to make full and frank disclosure of their financial position at all relevant times.
  6. Whether the trustee has failed to make full and frank disclosure of all relevant information that relates to the identification and valuation of the property comprising of the vested interests and provided information relating to the debts.
  7. The overall financial circumstances of the non-bankrupt party and the children, if any, of the relationship during the period since incurring the debt, at the time of proceedings and the effect of the proposed orders.
  8. Whether the debts were incurred before or after separation; and
  9. Whether any party derived any benefit from the debts and the nature and extent of that benefit.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Aiden Dallas

Aiden Dallas


As a freelance copywriter I love the flexibility of working anywhere across the globe and all the opportunities that come with it.