Discharge from bankruptcy definition

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The immediate effects of a bankruptcy order on the bankrupt

The purpose of a bankruptcy order is two-fold:•first, it is to secure the bankrupt's estate for the benefit of the bankrupt's creditors so that it can be realised to share out among the creditors by way of a dividend•secondly, it is to allow rehabilitation to the bankrupt by releasing them from their debts (with certain exceptions), which now fall exclusively on the bankruptcy estateIn order to police this policy properly—and ensure that it is fair to creditors—the trustee in bankruptcy (trustee) is given significant powers of investigation and, where necessary, to reverse the effects of antecedent transactions which had the effect of prejudicing the creditors. This Practice Note examines what happens after a bankruptcy order is made, its main effects, the period of bankruptcy, the bankrupt's discharge from bankruptcy, and the circumstances which might give rise to further sanctions being imposed on the bankrupt.This Practice Note does not examine the powers and duties of the trustee, or the way the trustee will deal with the bankruptcy estate. For further reading...

The 'three-year rule' in bankruptcy under section 283A of the Insolvency Act 1986

The 'three-year rule' and why it appliesThe reforms introduced by the Enterprise Act 2002 (EnA 2002) included the insertion of a new section 283A into the Insolvency Act 1986 (IA 1986) that essentially gives the bankrupt's trustee in bankruptcy (trustee) three years to take the necessary steps to realise or secure the bankrupt's interest in the bankrupt's home (as defined, see below), failing which that interest will cease to be part of the bankruptcy estate and will automatically re-vest in the bankrupt. This provision, commonly known as the 'three-year rule', applies to any person adjudged bankrupt after 29 December 1986 (the date that IA 1986 came into force) on a bankruptcy petition presented on or after that date (see Pannell v Official Receiver), although transitional provisions apply to any bankruptcy predating 1 April 2004.The rationale for the three-year rule was to eradicate the inordinate delays which under the old rules often occurred between the bankruptcy order and the trustee's application for an order for possession and sale of the bankrupt's...

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What happens to assets in a bankruptcy estate post-discharge of the bankruptcy, and do they remain vested in the trustee in bankruptcy indefinitely?

What happens to assets in a bankruptcy estate post-discharge of the bankruptcy, and do they remain vested in the trustee in bankruptcy indefinitely? The bankrupt’s estate remains vested in the trustee in perpetuity and does not re-vest in the bankrupt when the bankruptcy is discharged. Discharge merely releases the bankrupt from the restrictions imposed upon an undischarged bankrupt (see Practice Note: Discharge from bankruptcy). When the trustee obtains a release from office, the bankruptcy estate vests in the official receiver. An exception to this general principle concerns a dwelling

View the latest UK Parliament Acts documents on Discharge from bankruptcy

[279 Duration]

[(1)     A bankrupt is discharged from bankruptcy at the end of the period of one year beginning with the date on which the bankruptcy commences.(2)     . . .(3)     On the application of the official receiver or the trustee of a bankrupt's estate, the court may order that the period specified in subsection (1) shall cease to run until—(a)     the end of a specified period, or(b)     the fulfilment of a specified condition.(4)     The court may make an order under subsection (3) only if satisfied that the bankrupt has failed or is failing to comply with an obligation under this