Bankruptcy and the matrimonial home

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The matrimonial home is a central feature of many bankruptcy cases as it is often the most valuable asset in the estate available to be realised for the benefit of creditors. Because the matrimonial home is also usually the place where the bankrupt and their family live, there are many issues which may affect how it is dealt with. Such issues can often include:

  1. •

    whether the trustee in bankruptcy (trustee) has an interest in the property at all

  2. •

    whether any adjustments need to be made on the net sale proceeds

  3. •

    whether the court should make an order for possession and sale

  4. •

    the overlap with family law

The extent of the trustee's interest

The assets that vest in the trustee are the assets that comprise the bankruptcy estate. These will include all assets the bankrupt had a legal or beneficial interest in at the time the bankruptcy order was made (sections 283, 283A, and 436 of the Insolvency Act 1986 (IA 1986)). For further reading, see:

  1. •

    Practice Note: Definition of the bankruptcy estate and which assets vest in the trustee in

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Restructuring & Insolvency analysis: The High Court considered the validity of administrators’ appointments, made ‘out-of-court’ by a secured creditor under paragraph 14 of Schedule B1 to the Insolvency Act 1986 (IA 1986), where: (i) the appointments were made under security which the appointing creditor had acquired (together with the underlying debt) with the specific intention of calling an event of default and then acquiring the borrowers’ business and assets out of administration, and (ii) the companies were not actually insolvent, the event of default relied upon to render the security enforceable was the companies’ failure to provide information. The administrators sought reverse summary judgment and succeeded, the court finding that the appointing creditor was not subject to a Braganza duty and nor was its purpose in making the appointments improper.Written by Sam Fenwick, Partner, and Isabelle Burnett, Solicitor Apprentice, at Wedlake Bell LLP.

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CATJ publishes updated Business and Property Courts of England & Wales Chancery Guide 2022

The Courts and Tribunals Judiciary (CATJ) has published the updated Business and Property Courts of England & Wales Chancery Guide 2022. Paragraph 3.17 specifically clarifies that arbitration claims applications under the Arbitration Acts 1950–1996 and related matters must follow the procedures set out in CPR 62 and PD 62, and must be issued in the Chancery Division when they relate to partnership or landlord and tenant disputes.

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