This month we are joined Anna Lintner (Maitland Chambers) and Gareth Schofield (Clarke Willmott) to discuss the interconnection between bankruptcy and financial remedy cases.  For this episode, Anita is joined by guest host, Matthew Taylor (Stowe Family Law) who is a member of Resolution’s Pension, Tax and Financial Remedy Committee.  Matthew is an experienced podcaster as one of the presenters of Stowe Talks https://www.stowefamilylaw.co.uk/stowe-talks/

We have called this episode ‘The Final Frontier’ because, for most of our practice, we do not need to know about bankruptcy. Then suddenly you get a case where one of the parties is about to declare themselves bankrupt, or is already bankrupt, and suddenly you need to know all about this unexplored area.

Gareth mentions that he was one of the authors of Debt and Insolvency on Family Breakdown; https://www.abebooks.co.uk/book-search/title/debt-insolvency-family-breakdown/author/wendy-boyce/ and refers us to some of the key cases where family law and insolvency law interact being:

• Ball v Jones [2008] 2 FLR 1969 - where the Trustees in Bankruptcy was unable to challenge a consent order which had allowed the non-bankrupt to retain a much greater share of the assets;
• Haines v Hill and Another [2007] EWCA Civ 1284 - which is a Court of Appeal authority about how family law and insolvency work where consent orders are in place;
• Whig v Whig [2007] EWHC 1856 and Paulin v Paulin [2009] EWCA civ – in respect of annulling a bankruptcy;
• and Paulin v Paulin [2009] EWCA civ 221 – annulment cases with family law context and the risks of taking on a trustee in bankruptcy.

Anna tells us the important rule we must know about in bankruptcy is the pari-pasu rule, which means all unsecured creditors must be treated equally, which includes the bankrupt’s award in financial remedy proceedings.

Anna tells us that the Trustee in Bankruptcy cannot compel the bankrupt to draw their pension so that maybe one asset that can be preserved (Horton v Henry [2016] EWCA Civ 989)

We conclude with the importance of thinking about drafting and enforcement where there is a prospect of bankruptcy after the final financial remedy.