BANKRUPTCY

A bankruptcy order is made by the court on the petition of either a creditor or debtor. Once granted, the order falls within the public domain and is advertised in the London Gazette and a local newspaper. The Official Receiver will become the receiver and manager of the bankrupt's estate following the order. He may call a creditors' meeting to appoint a licensed insolvency practitioner as trustee. All assets then come under the control of the Trustee in Bankruptcy who is responsible for realising the assets of the bankrupt and distribution of proceeds to creditors.

The new bankruptcy provisions of the Enterprise Act 2002, that came into force on 1st April 2004, makes distinction between good and bad bankrupts.

Your questions answered on the new provisions:

What are the changes to bankruptcy discharge?
For good bankrupts discharge will occur after one year after the date of the bankruptcy order.

What about assets?
Assets will still form part of the bankrupt's estate.

What are BROs?
Bankruptcy Restriction Orders are a new civil regime to protect the public from those bankrupts whose conduct has been irresponsible or reckless. A BRO generally imposes restrictions that apply after a bankrupt has been discharged. Such restrictions apply for a period of between 2 and 15 years.

Will there be any changes regarding the matrimonial home?
The Enterprise Act 2002 provides a limit of 3 years on the period during which the Trustee in Bankruptcy can deal with the bankrupt's interest in a dwelling house that is the sole dwelling of the bankrupt, spouse or former spouse, following which period it will revert back to the bankrupt unless the Trustee either realises the interest, applies for an order of sale or possession, applies for a charging order or enters into an agreement with the bankrupt regarding the interest.

To discuss Bankruptcy call Philip Wood on 01782 713700.