Annulment of bankruptcy orders

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Annulment of bankruptcy orders
  • The effect of a bankruptcy order being annulled
  • The grounds for applying to annul a bankruptcy order
  • Who can apply to annul a bankruptcy order, and when can—or should—an application be made?
  • Grounds for annulment—the bankruptcy order ought not to have been made
  • Grounds for annulment—payment of the bankruptcy debts
  • The court's discretion to annul a bankruptcy order
  • Form of annulment order

Annulment of bankruptcy orders

This Practice Note looks at the annulment of bankruptcy orders under section 282 of the Insolvency Act 1986 (IA 1986) and the grounds upon which an annulment application can be based. For further reading on the process of applying to annul a bankruptcy order, see Practice Note: How do you annul a bankruptcy order and who can make the application?

The effect of a bankruptcy order being annulled

The annulment of a bankruptcy order restores the position to what it was before the bankruptcy order was made, as it cancels the bankruptcy order. Therefore, the debtor will remain liable in full for all the bankruptcy debts, but any property which vested in the trustee in bankruptcy will revert to the debtor.

Any sale or disposition of property comprising the bankruptcy estate by the official receiver or trustee in bankruptcy prior to the annulment of the bankruptcy order is valid.

The grounds for applying to annul a bankruptcy order

There are three grounds upon which the court can make an order annulling a bankruptcy order:

  1. if it appears to the court that, on any grounds existing when the bankruptcy order was made, the order ought not to have been made (IA 1986, s 282(1)(a))

  2. if it appears to the court that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy

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