Property Settlement Rights of the Non-Bankrupt Spouse

One area of Family Law that is little-understood is settlement of property when one of one spouses or de facto partners has become bankrupt.. If your spouse or de facto partner is in this predicament, it does not always follow that third-party creditors will get all of the bankrupt’s assets.

The court needs to balance the competing interests of the non-bankrupt spouse against the interests of the bankrupt’s creditors.

In the event of bankruptcy, it is still the case that the non-bankrupt spouse can make a claim for an equitable division of the assets of the relationship.