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Gareth Schofield, Partner, Clarke Willmott
This article considers the case Re Jones (A bankrupt); Ball v Jones  2 FLR 1969 (Ball v Jones) and its importance to family lawyers in clarifying the principles set out in Haines v Hill and Another  EWCA Civ 1284,  1 FLR 1192 in the Court of Appeal. It highlights the fact that the practitioner must consider carefully and advise their clients effectively as to how the possibility of bankruptcy will affect their client's possible claims, and settlement, and must be prepared to respond swiftly as circumstances change.
The case Burke v Chubb  EWHC 341 (QB),  2 FLR 1207 is a salutary reminder of the possibility of negligence if that advice is not given, particularly when the other spouse is prepared to co-operate and proactive steps taken to follow it. That advice needs to include consideration of whether it is possible to preserve assets for the family rather than the bankrupt's creditors in a situation where the bankruptcy has not yet occurred. The non-bankrupt client will also want to know if they are protected from a later claim by a trustee in bankruptcy if they are the beneficiary of a property adjustment order and the potentially bankrupt client will want to know if there is any benefit to transferring a property to their former spouse to avoid their creditors.
In most cases where solvency is an issue, the only asset of significance owned by the parties will be a property, generally owned in the parties' joint names as joint tenants. This article focuses on that particular circumstance and in particular whether a property adjustment order will be effective against a subsequent claim by the trustee in bankruptcy. A future article will look at the overall effect of insolvency on ancillary relief claims, including lump sums, and pensions.
To read the rest of this article, see October  Family Law journal.
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