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Division of property: Wife shares pension despite bankruptcy

Separating couples have a lot to sort out. One of the issues that is on the table when a couple decides the marriage has come to an end is the division of property. But it can get a little tricky in British Columbia if one of the spouses declares personal bankruptcy after having separated. Pensions are usually considered during the divorce or separation.

Pensions, however, usually don't figure into bankruptcy under the Bankruptcy and Insolvency Act, but what happens to pension funds if one spouse has declared bankruptcy depends on where the couple lives. Recently, a wife asked for an unequal division of the property shared with her husband, and the major asset was the husband's pension. Shortly afterward, the husband declared bankruptcy. A judge of the Alberta Court of Queen's Bench had to decide if the wife could pursue her claim against her husband's pension, giving consideration to Alberta's family property legislation.

The judge ruled that the wife's claim didn't meet provable bankruptcy and she didn't have to compete with her husband's other unsecured creditors in the bankruptcy filing. This meant the wife would get her share of the pension by virtue of the property division system under Alberta family property law. Judges have ruled otherwise in other provinces, like Ontario, for example.

There are many circumstances surrounding separation and divorce that can be extremely confusing in British Columbia. A family law lawyer experienced in such issues -- like division of property -- may be able to bring some clarification to the laws that govern complex issues. A lawyer may prove especially helpful when family law crosses into other areas of the law.

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