Bankruptcy 'used to avoid divorce settlements'

People facing divorce settlements have been declaring themselves bankrupt to avoid the financial consequences, it has been stated.

Judges have criticised the practices used by some husbands after the case of millionaire William Paulin, who declared himself bankrupt to avoid a payout to his ex-wife Nancy.

The appeal court dismissed his attempt to overturn the annulment of his bankruptcy, meaning he now has to pay £1 million to Ms Paulin.

"A tactic now occasionally adopted by a devious husband confronted with an application by his wife for financial relief ancillary to divorce proceedings is to issue proceedings for a bankruptcy order to be made against himself," said Lord Justice Wilson as he delivered the verdict.

Such a situation could be prevented by an amicable settlement, something which may be achieved without lawyers using a DIY divorce kit.

Among high-earning individuals facing major losses is former footballer Neil Ruddock.

The cost of his divorce from ex-wife Sarah has left him potentially facing repossession after causing him to fall behind with his mortgage repayments, it was reported this week.

Written by Rachel Crook

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Published on: March 18, 2009

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