The Telegraph has this week reported on the Court application brought by Alexander McRoberts, who is seeking an order that he should not have to pay off his matrimonial debts following his bankruptcy. Mr and Mrs McRoberts separated in 2003 and as part of their financial settlement he agreed to pay her more than £500,000 by instalments. He paid £211,000 of the amount owed before he was declared bankrupt in 2006. Mrs McRoberts is now in a more stable financial position than her former husband, who states that the payment of the £349,000 still owing is impossible at the current time, or in the foreseeable future.
Bankruptcy lasts for one year, and Mr McRoberts’ bankruptcy was discharged in 2007. The current position is that matrimonial debts from lump sum and costs orders “survive” bankruptcy, and Mrs McRoberts’ barrister claimed that finding in Mr McRoberts’ favour could open up a legal loophole, “opening the door to all the bankrupts out there who don’t want to pay their lumps sums in family proceedings.”
The case is being heard in the High Court. Mr Justice Hildyard said: “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.” He did, however, also comment that “it may well be that the bankruptcy court can take those changing needs into account.”