Bankruptcy Matters that can be heard in a Family Court Procedure

A Family Court and Federal Circuit Court can proceed to hear and deal with any issues related to bankruptcy as long as it arises or is directly connected to the bankruptcy of a party to the case lodged before its jurisdiction.

It may include any of the following:

• the property settlement of spouses under section 79 of the Family Law Act 1975;
• Interest in the property under section 778 of the said Act;
• Setting aside a property order issued by the Cour under Section 79A of the same Act;
• Spouse maintenance and any hearing to enforce any of the these orders.

The Property of a Bankrupt Spouse

The property of a bankrupt spouse (in a marriage) or partner (in case of de facto relationship) will be immediately frozen and vested in a trustee. The Court has the power to order the trustee to transfer these properties to other person as it may see fit. The Bankrupt he can still use some of his assets and properties like household goods, tools of trade and vehicle up to a certain value fixed by the Court.

In determining the priority of reimbursement and allocation of the frozen assets of the Bankrupt, the Court will take into consideration all the competing rights of all the creditors as well as the non-bankrupt spouse/partner. No priority is given to either of them without determining and weighing the interest of all the claimants. Any party who claims interest over the asset of the Bankrupt must give notice to the court at the very start or during the hearing of the case.

Any persons who are affected by an order in a property proceedings can file an application before the court to set aside or vary the said order. This is very important since it can potentially affect the rights and interest of any party over the property of the bankrupt. In order for the Court to set aside or vary his order, it should give equal opportunity to all parties concerned to present their evidences and documents that supports their respective contention.