Q. What is the jurisdiction of the Official Receiver when you are insolvent, in the scenario that you own property with partners? Do they have the power to interfere with this property which is jointly owned? Or do they only have power over the property only owned by the insolvent person which will cover the debts due? Can they force valuations of jointly-owned property or can you, if enforced, organise these yourself?
Following the making of a Bankruptcy Order any interest an individual has in a property whether solely or jointly owned will vest in the Trustee in Bankruptcy/Official Receiver. The Trustee/Official Receiver’s role is to realise assets in order to settle bankruptcy debts. If property is jointly owned the Official Receiver/Trustee interest will only vest in the share of the bankrupt. The Official Receiver will usually have 3 years within which to arrange a sale of the bankrupt’s interest in the property. If proposals to purchase the bankrupt’s interest are not received whether from third parties or the other co-owners, the Official Receiver/Trustee in Bankruptcy will seek an order for sale through the Courts.
It is advisable for the bankrupt or other co-owners to get their own valuation evidence to support any offer that they wish to make to acquire the interest from the Trustee in Bankruptcy Official Receiver. The Trustee will usually obtain their own valuation evidence in any event to ascertain the value of their interest in the property and to consider any offers made. It is advisable for the co-owners to seek their own independent legal advice as to the effects of the Bankruptcy Order on their interest.
Kally Singh, partner
*This article was previously published in the Stamford Mercury & Peterborough Telegraph