Bankrupt man argues his spousal maintenance debt should be written off

23 October 2012

A test case has been brought in the High Court in London by a man seeking a ruling that he is no longer liable to pay maintenance to his ex-wife as he was declared bankrupt

A divorced former company boss, who still owes his ex-wife £350,000 in matrimonial debts, has brought a test case in the High Court in London claiming he should no longer have to pay off this debt since he went bankrupt. The couple separated in 2003 when Mr McRoberts was head of a company with a reported multi million pound turnover. In addition to the family home he agreed to pay his wife over £500,000 in instalments.

In 2006 Mr McRoberts was declared bankrupt. By then his ex-wife had received only £211,000 of the settlement monies and was registered as a creditor in that bankruptcy. Mr McRoberts bankruptcy was discharged in 2007 and his ex-wife is pursuing him for the £349,000 she claims remains outstanding from their divorce settlement.

Counsel for Mr McRoberts has asked the Court to rule that the matrimonial debt did not ‘survive’ the discharge of his client’s bankruptcy. He has told the court that his client’s financial position makes any chance of repayment of the £349,000 impossible either now, or in the foreseeable future, and voiced his client’s fears that he will once again be made bankrupt should the debt not be expunged.

Counsel for Mrs McRoberts argued that if Alexander McRoberts manages to get the £350,000 claim written off it could open the floodgates for unscrupulous spouses who do not want to pay the lump sums awarded in family proceedings.

The Judge stated "I don't want to do anything that suggests that so long as you go into bankruptcy that is the gateway to avoiding the family court's orders.” However he also remarked on the curiosity raised as to the relationship between the bankruptcy jurisdiction and the family jurisdiction and commented "If the ongoing order was made as a crystal ball assessment of the parties' needs, it may well be that the bankruptcy court can take those changing needs into account."

No decision has yet been made in this case however we await the outcome with interest.

Clare Curran is a Partner with Worthingtons Solicitors and is head of the Family Law team.  Clare is an accredited member of the Children Order panel and is also trained and qualified to practise collaborative law, a system designed to assist couples in seeking a resolution of their matrimonial issues, without resorting to going to court.

 

 

 

Links

Newsletter Signup