Ex husband going bankrupt

[Twinkladdictmum]

My friend's ex husband is going bankrupt. She is renting at the moment, paid for from the equity in the house, which she got in the divorce. He says he is in no position to pay her anything, ir comply with a court order, and she doesnt think she will qualify for any benefits as she still has the equity from the house, in her savings account.
They have 2 kids, he has remarried but was meant to be paying my friend maintenance and child support.
What should she do?

Did they get a financial order in the divorce?

How old are the children? Can she work?

MesBertBibby im not sure.

Shakey15000 technically yes but she hasnt worked since she had the children, both early teens.

If he's declared bankrupt I think even if she were to the him to court to try and enforce the court order, which would cost money she may not have, they'll probably say he can't give her what he doesn't have.

Does she get CSA or court ordered child maintenance?

NoAnnelovesGilbert. It was all paid via his own companywhich he has just put into voluntary liquidation.

He can't give her money he doesn't have.
If her children are early teens then she needs to start job hunting!

She wants to move back to where her family are from, a few hundred miles away and is worried he might try and stop her taking the kids and that she would have to use her savings to fight him. That isnt likely though is it? Given that he cant support any of them?

what do the kids think about that idea?! Not many teenagers would relish that move. Are they close to their dad? The courts place a lot of weight on the child's feelings by that age

You need to find out pronto about the order. If there's no order, she could find his trustee in bankruptcy trying to claw back his half of the house equity.

If there is in fact an order for child and spousal maintenance, it is not provable in the bankruptcy, so he remains liable, unless the family court orders otherwise.

He shouldn't be paying maintenance through a company. The trustee in bankruptcy may have some questions for him there.

The kids are far from thrilled but without going into detail their father is a terrible influence and even they can see that. They see him regularly but they dont stay with him. Can he make my friend stay put even though he wont be looking after the children himself?

I doubt he could make her stay put if she needed to move for work. Somebody has to support them. If it was me I'd move and not tell him.
She should def get legal advice though if child support and maintenance are not included in his bancruptcy.

i think she needs to start looking for a job.

MrsBertBibby im not sure but i would be prepared to bet that there was no court order. Theyve been divorced 2 years, although the house was only sold less than a year ago. How do you find out who the bankruptcy trustees are? It was a family firm btw.

And yes he shouldnt have paid her through the company but he insisted, so she was/is on the payroll. If it is voluntary liquidation how w

Sorry i pressed send too soon

how would the liquidators pick that up? On paper it looks legit.

Hoddtastic well yes but if she is moving away she may as well look there as here.

And yes he shouldnt have paid her through the company but he insisted, so she was/is on the payroll.

Do you mean she is or was on the payroll, but she has not really been working for the company?

Yes. Not ideal but he insisted.

She needs legal advice. This whole arrangement sounds dodgy and she should not have allowed him to set conditions on how she received maintenance without going through a solicitor.

Yes, she is in touch with her lawyers. It seems to have dragged on for so long and she just wants this to be over. It feels so unfair, all of this was his doing.

It's tax evasion on his part, and it's costing her, since she'll have to declare it as earned income, which is taxable, as opposed to child or spousal maintenance, which is tax free in the recipient's hands.

Best thing your friend can do is get herself a job, some type of paid employment. Then she needs to see what her position is regarding tax credits etc.

MrsBertBibby i think he did it so she could still have a car through the business and what she "took home" was the same or more than she would have got if she had forced him to pay it himself.

Ivykaty she reckons she wouldnt get any benefits/tax credits at all as she has the equity from the house.

Yes i agree and she knows this longer term but all this has just happened and as you can imagine it is pretty scary. Her husband is a collossal bastard.