Recently, after 20 years of marriage, Lawrence Dallaglio, the former England rugby player, and his wife, Alice, were in court to thrash out a separation settlement. The marriage had weathered brothel parties and cheating scandals. Alice had an affair with a multi-millionaire property developer. Allegations against Lawrence included splurging £10,000 a night at brothel parties with £300 per hour sex workers. Dallaglio was made bankrupt in May 2025 due to an unpaid tax bill. So, how does bankruptcy impact a financial settlement on divorce? The answer is that it can have a devastating impact since following a bankruptcy order all of the bankrupt’s estate vests in the trustee in bankruptcy. The family court cannot generally order transfer of property from the bankrupt to the other spouse. However, it is important to note that as long as the financial remedy order has been sealed by the court, the trustee in bankruptcy is unlikely to be able to challenge the order. Therefore, if a marriage is in difficulty and a spouse is facing significant financial problems that could lead to a bankruptcy petition being made, it is necessary for the spouse making the claim for financial remedy on divorce to move quickly failing which the marital assets will be taken as a result of the bankruptcy proceedings.
