Division of joint property in bankruptcy – post. Supreme Court of November 9, 2019, V CSK 615/17

Division of joint property in bankruptcy – post. Supreme Court of November 9, 2019, V CSK 615/17

The court continues the division of the joint property despite the declaration of bankruptcy of one of the spouses (post. Supreme Court of November 9, 2019, file reference number v csk 615/17)

Division proceedings, including, inter alia, real estate previously used for running the business of one of the spouses should be continued after the spouse’s bankruptcy has been declared. The condition is that the divorce judgment becomes final before the declaration of bankruptcy and that the judgment is not ineffective against the bankruptcy estate within the meaning of Art. 125 sec. 1 and 3 BCE

The circumstances of the case and the content of the decision

Proceedings for the division of the spouses’ joint property were pending before the district court. The subject of the section were assets used by the participant as part of business activity. In the course of the proceedings, about six years after the spouses divorced, the participant was declared bankrupt. The District Court ruled that the division proceedings are subject to discontinuation due to the inadmissibility of the division of the joint property of the spouses during the bankruptcy proceedings. The district court, dismissing the appeal, shared the position that Art. 124 sec. 1 BRL and art. 355 § 1 of the Code of Civil Procedure.

The Supreme Court allowed the applicant’s cassation appeal, finding that:

  • the declaration of bankruptcy of one of the spouses does not have any impact on the pending proceedings for the division of joint property, in particular, it does not cause its redemption,
  • in the event that the declaration of bankruptcy concerns one of the former spouses who have previously been divorced, the joint property may not cease, let alone – as stated expressis verbis in Art. 124 sec. 1, first sentence, pr. he fell. – establishing compulsory property separation within the meaning of Art. 52 and n. k.r.o.

Proposal

When the court division of the spouses’ property is in progress, the bankruptcy of one of them has no effect on the course of these proceedings. Bankruptcy, on the other hand, may prevent the termination of community and division of property if it occurs during the marriage or when legal events (divorce, marriage contract) arise too shortly before the declaration of bankruptcy (Articles 125-126 BRL).

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