In a potentially precedent-setting case that is being closely watched by divorcing spouses, family lawyers, judiciary and legislators around the world, a British court is mulling over whether filing for bankruptcy can wipe out spousal support obligations.
The case in question involves Alexander McRoberts, a company director who separated from his ex-wife in 2003. At the time, the court ordered him to pay about £500,000 (about $800,000US) in spousal support via regular installments.
However, McRoberts, who has since filed for bankruptcy after paying £151,000 of that obligation, claims that the remaining £349,000 did not “survive” his bankruptcy – and so he wants the courts to discharge it, like any other debt.
Some British family lawyers worry that, should the court’s agree to quash McRobert’s remaining spousal support obligations, that it will open the door for ex-spouses across the country to follow suit – not as a consequence of falling on hard financial times, but as a tactical method to circumvent their spousal support obligations.
It appears that the Judge in the case, too, is concerned about the implications, and reserved his decision while he explores the overlap between family law and bankruptcy law.
Source: Financial Times
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Certified Divorce Financial Analyst
Business Valuators / CPAs