Once a Bankruptcy Order is made, the adjudicator delivers a copy of the order to the debtor and the Official Receiver. The Bankruptcy Order dates from the date the bankruptcy application was acknowledged by the adjudicator.
The Official Receiver will be appointed as the Trustee in Bankruptcy and will place a notice about the order in The Gazette. They will then apply to the Chief Land Registrar to register the Bankruptcy Order as a Receiving Order in the Register of Writs and Orders and will enter the details on to the Individual Insolvency Register.
The remainder of the process is as all other bankruptcy procedures: the assets of the bankrupt at the time of the bankruptcy will vest in the Trustee in Bankruptcy who realises and distributes assets for the benefit of the creditors.
Whilst the bankrupt will generally be discharged after 12 months, the assets falling within the bankruptcy estate continue to vest in the Trustee until he has completed the realisation and distribution process. The Trustee has three years from the date of the Bankruptcy Order to realise any interest in the debtor’s main family home, otherwise the interest will cease to vest in the Trustee.
There is no restriction on the movement of a bankrupt, who may move abroad after the order is made, although all assets vesting in the Trustee should remain in England and Wales.
Are foreign assets and creditors considered in a UK bankruptcy?
By section 283 of the Insolvency Act 1986, all the assets and property in which the debtor has a beneficial interest at the date of the bankruptcy fall within the bankruptcy estate. There are certain items which are exempt, including the debtor’s tools of trade and items required to meet basic domestic needs.
All the debtor’s assets fall within the estate and vest in the Trustee regardless of their whereabouts.
Are foreign creditors considered in a UK bankruptcy?
All creditors of the debtor, including foreign creditors can make a claim in the bankruptcy. Issues may arise where foreign creditors would have different, and more beneficial, distribution and priority rights had the debtor been made bankrupt in the creditor’s jurisdiction and they may have the right to commence secondary insolvency proceedings in their own jurisdiction. To avoid this the Trustee in Bankruptcy may undertake to give those creditors the same rights they would have held in their own jurisdiction.
This is case specific and legal advice should be taken as to the options available to the creditor and the Trustee in Bankruptcy.
Conclusion
If you want to find out anything further about this topic then please feel free to call me on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com.
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
Leave a Reply