Changes to Family Law Act may have a significant impact on financiers: financiers and advisers who have exposure to parties to a marriage (even as directors or shareholders of corporate borrowers) must implement procedural and/or documentation changes now to minimise and manage their increased risk and exposure.

Publication: Journal of Banking and Financial Services

Publication Date: 01-JUN-05

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COPYRIGHT 2005 Australian Institute of Banking and Finance

For banks and other members of the financial community, the Family Court is now a force to be reckoned with. Its broad new powers could change the traditional face of lending.

On 17 December 2004, amendments to the Family Law Act came into force that could have a significant impact on the dealings financiers, financial advisers and accountants have with both companies and individuals where married persons are involved.

The amendments--which were enacted in December 2003 under the Family Law Amendment Act 2003--introduced a new Part VIIIAA to the Act. In the context of family law proceedings in relation to the debts and property of married persons, this empowers the Family Court to make a range of orders and grant injunctions that are directed to, or alter, the rights, liabilities or property interests of a third party.

Third parties bound by the Family Court's new powers will include any creditors, including banks and other credit providers. The amendments redefine the term 'debt' on the...

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