Possession and sale applications in respect of a bankrupt's family home
Possession and sale applications in respect of a bankrupt's family home

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

  • Possession and sale applications in respect of a bankrupt's family home
  • Property which vests in the trustee
  • How the trustee establishes the extent of their interest in the property and accounts for any adjustments that may need to be made
  • The steps a trustee should take before considering applying to court seeking an order for possession and sale
  • When should the trustee apply to court seeking an order for possession and sale?
  • How the application to court seeking an order for possession and sale is issued and the matters the trustee should set out
  • The order typically made by the court when making an order for possession and sale

When the bankrupt's estate vests in the trustee in bankruptcy (trustee) immediately following the trustee's appointment, the bankrupt's property (including their place of residence) will usually be the most valuable asset in the bankruptcy estate. When appointed, the trustee's main aim will be to secure and realise the value of the bankrupt's interest in any property for the benefit of the bankruptcy creditors. Achieving this will involve several challenges which, depending on the specific circumstances of the case, could include:

  1. ascertaining whether the bankrupt has an interest in the property, or has disposed of any interest in the property

  2. ascertaining whether any other parties (including the bankrupt's spouse or civil partner) have an interest in the property

  3. ascertaining the extent of each party's respective interest

  4. ascertaining whether any adjustments may need to be made out of the net sale proceeds

  5. establishing whether it is appropriate to apply to court and, if so, the timing of any application

  6. dealing with any other issues which may arise, such as special circumstances of the bankrupt's family, or divorce proceedings

For further reading on the initial steps that a trustee should take on appointment, see Practice Notes:

  1. The immediate effects of a bankruptcy order on the bankrupt

  2. Protecting a trustee in bankruptcy's interest in property following their appointment

This Practice Note addresses whether the trustee can apply