Divorce clause query

debt_doctor

Hi,

I can tell you how we have been taught how to deal with such matters is that disposal of property / assets under family proceedings prior to a bankruptcy order being made still stands (ie the Insolvency proceeding will have no effect upon it) providing that the family court had the full financial disclosure details of all parties at the time and that the proceedings were not entered in to deliberately to defraud (future) creditors.
Other matters such as the court ruling who should pay what are binding between the parties only, one party could sue the other should they not pay - but pointless if they had no ability to pay.

From that I see your obligation to pay is binding between you and your ex only and would not affect your bankruptcy, I have seen a few such arrangements go in to BR without a problem.

That is my view based on our current / past practice.

DD

fermi

debt_doctor wrote: »

From that I see your obligation to pay is binding between you and your ex only and would not affect your bankruptcy, I have seen a few such arrangements go in to BR without a problem.

Do you mean in the sense that the OR/trustee accepted and allowed for such payments in the BR's SOA?

debt_doctor

fermi wrote: »

Do you mean in the sense that the OR/trustee accepted and allowed for such payments in the BR's SOA?

In the event of being bound to pay loans or other contractual obligations to third parties, these were deemed to be binding between the parties only (one ex promises to pay for/with the other ex) and ignored in bankruptcy.
If there was an obligation to pay maintenance then this would be an allowable expense in any IPA/O.
However, beware, because I cannot lay to hand any defining proof that this is indeed how it should be!

DD

fermi

debt_doctor wrote: »

In the event of being bound to pay loans or other contractual obligations to third parties, these were deemed to be binding between the parties only (one ex promises to pay for/with the other ex) and ignored in bankruptcy.
If there was an obligation to pay maintenance then this would be an allowable expense in any IPA/O.

So are you saying the OR should allow these payments in the SOA?

zzzLazyDaisy

Firstly apologies as I don't know much about bankruptcy, but I do know something about family law, so hopefully my comments may be helpful.

To answer a couple of questions:

Divorce proceedings are 'family proceedings'.

Also the court order re paying the mortgage only binds the two parties - it does not bind the Lender who can still pursue either party since you both remain jointly and severally liable for the debt.

debt_doctor

fermi wrote: »

So are you saying the OR should allow these payments in the SOA?

I don't expect the OR to treat the 'promise to pay' as binding upon them (the IS).
I expect the OR to treat this payment as they would any other in an IPA - Is this a reasonable expense for the bankrupt and I don't expect the prior agreement in the family court to have any effect upon their decision.

So, as the OP lives in the mortgaged house with their children then that would be a reasonable expense for a BR in an IPA, but should the O/P be unable / not want to pay the mortgage I believe the eventual shortfall debt would fall in to their BR and the family court 'promise to pay' would have no effect at all.

DD

DD

fermi

debt_doctor wrote: »

So, as the OP lives in the mortgaged house with their children then that would be a reasonable expense for a BR in an IPA

Ah! For some reason I missed those posts, and assumed they were in separate accomodation. In that case, yes, it not really relevent and would be treated as normal assuming that the mortgage payments are not excessive as an individual.

So if the OR considers that despite the order that it is unreasonable for the OP to be paying the whole mortgage then that could be disallowed in any SOA calculation?

silvercar

debt_doctor wrote: »

I don't expect the OR to treat the 'promise to pay' as binding upon them (the IS).
I expect the OR to treat this payment as they would any other in an IPA - Is this a reasonable expense for the bankrupt and I don't expect the prior agreement in the family court to have any effect upon their decision.

So, as the OP lives in the mortgaged house with their children then that would be a reasonable expense for a BR in an IPA, but should the O/P be unable / not want to pay the mortgage I believe the eventual shortfall debt would fall in to their BR and the family court 'promise to pay' would have no effect at all.

DD

DD

So do you mean that the OR could ignore OP's obligation (by court order) to continue to pay the mortgage? eg if the OR thought the property and payment excessive for OP's needs it wouldn't have to allow the full amount?

So a possible consequence could be the ex going back to court and stating OP isn't meeting the obligation and asking for an attachment of earnings or agreeing that ex pays some of maintenance direct to lender as OP isn't making payments themselves? The effect of which would be to reduce income of OP and therefore directly reduce an IPA - so in effect, after needless hassle, OR is being obliged to accept the court instruction.

Jumping ahead I know as we don't know the motive of OP's question.

alastairq

Ah! For some reason I missed those posts, and assumed they were in separate accommodation.

Yup, I had to ask as well, but hat was yesterday, in another life, on another planet....I've slept since then.....luckily, I woke up this morning [otherwise S&H would have had no breakfast!]...

In any event, the impression I get from the OP is that, in order to afford to meet the mortgage payments, the OP is considering BR to dispose of other debts?

debt_doctor

silvercar wrote: »

So do you mean that the OR could ignore OP's obligation (by court order) to continue to pay the mortgage? Yes I do, as the agreement is only binding on the former couple. eg if the OR thought the property and payment excessive for OP's needs it wouldn't have to allow the full amount?

So a possible consequence could be the ex going back to court and stating OP isn't meeting the obligation and asking for an attachment of earnings or agreeing that ex pays some of maintenance direct to lender as OP isn't making payments themselves? Just like a CCJ obtained prior to BR, I don't believe the ex would have any remedy against the BR. The effect of which would be to reduce income of OP and therefore directly reduce an IPA - so in effect, after needless hassle, OR is being obliged to accept the court instruction.

Jumping ahead I know as we don't know the motive of OP's question.

It's all interesting stuff isn't it! As I said earlier, I only base what I am saying upon events I have seen in the past.

DD