Don’t let bankruptcy frustrate your family law proceedings

Posted on Feb 26, 2015 by Jillian Stibbard   |   Categories: Family Law, Insolvency & Bankruptcy

It is not uncommon for bankruptcy and insolvency issues to go hand in-hand with the breakdown of a relationship. In matters where a party in family law proceedings is at risk of becoming insolvent, the timing of any arrangements, including a Personal Insolvency Agreement, is crucial writes Jillian Stibbard.

Recently, a husband was ordered to pay $100,000.00 for forensic investigation fees and future legal costs of the wife. After the making of the Order, the husband signed an authority under section 188 of the Bankruptcy Act, 1966 (Cth) to enable a Trustee in Bankruptcy to take control of his property under a Personal Insolvency Agreement (“PIA”).

The wife applied for the release of the husband’s property from the control of the Trustee on the gound that the PIA would frustrate the Family Court proceedings.

The Court held that “special circumstances” under the Bankruptcy Act existed, to justify an order releasing the husband’s property from the Trustee’s control.

If you have a family law matter and are concerned about the impact of bankruptcy on your proceedings, contact our Family Law team on (02) 4944 3322 or email