Financial hardship often leads to divorce, but divorce does not solve the financial problems.
In English law the husband and wife are each responsible for their own debts, and not responsible for the other’s. Therefore, one can become bankrupt without necessarily bringing the other one down. Very often however, in the attempt to stave off increasing hardship, the husband or wife may have borrowed money themselves to help their spouse. It may not be an easy task to get that money back, if it is possible at all. In the worst case, if the spouse has taken full joint indebtedness, say, in respect of a mortgage, their property will go as well. A solicitor dealing with a divorce and bankruptcy has to look closely at whether the circumstances of any joint indebtedness were coerced, or even arose from forgery.
The spouse of a bankrupt has a right of occupation in their home for a year, but after that, the trustee in bankruptcy can sell it regardless of any divorce proceedings.
Sometimes the spouse can establish that he or she has a share in a property even if they are not on the title. That requires a solicitor to carefully analyse the past financial arrangements to see if there is such a claim. Alternatively, the spouse of the bankrupt may also have the possibility of negotiating to buy out the bankrupt’s share of the property.
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