The highly rated Property division and child and spousal support lawyers at the MacLean Family Law Group, based out of Vancouver, Surrey, Kelowna, and with offices in Fort St. John, want to talk to you a bit about bankruptcy.
Spousal and child support:
First of all, child support and spousal support obligations are on-going and not affected by bankruptcy, under s. 178 of the Bankruptcy and Insolvency Act.
Protect Yourself With Property:
Obtaining a s. 67 Order restraining the use of family assets can be an important way to protect yourself–in many circumstances, an assignment into bankruptcy after a s. 67 Order is obtained may well be a breach of that Order.
When it comes to land, the most important thing to do is secure priority–that means getting in there before other creditors. The most common way to do this is to file a Certificate of Pending Litigation and then obtain a declaration under s. 57 of the Family Relations Act which crystalizes your 50% interest in the property (also sometimes referred to as a “triggering event”–see the case below). This also has the effect of ensuring that creditors do not have access to the whole of any assets owned in joint tenancy–like most houses.
But what if you’re entitled to more than 50%? The authorities appear divided upon that issue–one of the best summaries was in Montalban v. Montalban, 2007 BCSC 1266, where the Honourable Madam Justice Martison considered a number of authorities and stated:
[72] The basic rule used it that there can be no reapportionment of assets which have vested in the trustee. The source of that rule is a statement made in obiter (not necessary to the decision) in Biedler, subsequently adopted in Pigeon. An obiter statement to the opposite effect in Ford v. Ford (December 3, 1984), Victoria Registry No. 1581/84, was cited in Baker, but appears not to have been referred to since.
[73] The reason for the confusion in the case law is that courts have departed from the Biedler “no reapportionment” premise for various reasons. For example, where there has been a restraining order against the assets in question before bankruptcy, there is authority that reapportionment is available: Thompson. Thompson though was questioned in Stasiuk on the basis that it appeared to ignore, and was contrary to, the decision in Biedler. Courts have also allowed reapportionment where title to the family assets was in the name of the non-bankrupt spouse and where no triggering event had occurred at the time of trial: Beninger, Hamilton. The date of the bankruptcy, relative to the triggering event, has also been held to impact upon the availability of reapportionment: Verbeek..
In other words, if you have concerns regarding bankruptcy, the best steps to take to protect your interests are to get immediate orders under sections 57 and 67 of the Family Relations Act, and put a Certificate of Pending Litigation on any real property.
All of our lawyers at our 4 offices across BC can help you but speed is of the essence in these cases so call us toll free at 1 877 602 9900.
