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(Chancery Division, Hildyard J, 1 November 2012)
A consent order was made in 2003 in relation to financial claims following divorce. The order provided for the husband to transfer the matrimonial home and all shares in a specified company to the wife and to pay her a lump sum of £450,000 in a number of instalments. The husband failed to keep up the instalments and he was declared bankrupt.
There was a large deficiency in the bankruptcy and no distributions could be made to unsecured creditors. The wife received nothing and now was owed £350,000 including interest. A year after being declared bankrupt the husband was discharged from bankruptcy. The husband applied to discharge the lump sum order. Section 281(5) of the Insolvency Act 1986 included orders made in financial proceedings as an exclusion from the bankrupt's discharge of debt although they may be discharged at the court's discretion.
In all the circumstances of the case the balance remained in favour of keeping in place the obligation to the wife, there was no sufficient reason to override the default provision. The husband's application was dismissed.
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