We defend possession and sale applications brought by Trustees in Bankruptcy against the family home. We often represent spouses of bankrupts by asserting their rights in the family home which they may be unaware of being able to assert.
We routinely purchase the Trustees’ interests in the family home on behalf of the spouse or other family members of the bankrupt. Our firm frequently negotiates the market values and asserts third party interests in the home, reducing the amount the Trustee is able to claim. We give consideration to whether, for example, the bankrupt’s spouse or parents have a legitimate interest in the property having paid the deposit or contributed to the maintenance or refurbishment of the property in question. This may significantly reduce the Trustee’s interest in the property allowing a third party, often a family member, to pay an affordable amount to purchase the Trustee’s interest.
A Trustee in Bankruptcy usually brings possession proceedings against the family home by relying upon s339, s340 and s423 of the Insolvency Act 1986. These three sections refer to the sections below, respectively;
Transactions at an Undervalue
We also specialise in defending applications brought by Trustees in Bankruptcy who seek to set aside transactions at an under value. These are transactions are said to have been entered into by the bankrupt at an under value by selling, disposing or transferring their property for less than market value, within 5 years of the bankruptcy order having been made. The test as to whether the bankrupt had entered into a transaction and given away more than he has received will require careful consideration and advice. If for example a bankrupt has transferred an asset worth £400,000 and only received £300,000, the Trustee will argue that he is able to recover £100,000 and therefore issues such as the market value of the property at the time in question arise. The Trustee in this situation will normally attempt to recover money or property from the person who has benefitted from the transaction, also called the “transferee”.
The Trustee in Bankruptcy will be required to demonstrate to the Court that the bankrupt was insolvent at the time of the transaction or became insolvent as a result of the transaction. There is an exception to this, namely when the bankrupt had entered into the transaction involving an “associate”, in which case, the burden shifts to the bankrupt to show that he was not insolvent nor did he become insolvent as a result of the transaction. An “associate” of the bankrupt includes the bankrupt’s spouse or a relative or relative of the bankrupt’s spouse.
We regularly defend preference payment applications brought by Trustees in Bankruptcy alleging that the bankrupt has made preference payments to one or some of his creditors, thereby placing the bankrupt’s chosen creditor in a more advantageous position than they would have otherwise had been in.
We investigate the background and reasons behind these transactions and successfully argue that the bankrupt had good commercial reasons to make payment or transfer property, for example, the payment may have been made to ensure the bankrupt’s survival in business”.
We specialise in defending applications brought by Trustees in Bankruptcy to set aside property transactions said to have occurred with the purposes of defrauding creditors. There is no time limit for the Trustee to bring such an application. The Trustee will seek to persuade the Bankruptcy Court that the transaction in question should be reversed. In order for a Trustee to be successful on such a challenge, he must show that it was the bankrupt’s intention to place the asset in question beyond the reach of his creditors.
Again, we investigate the background to the transaction and assess the likelihood of the Trustee succeeding. We enter into settlement discussions with the Trustee or his legal advisors in bringing the dispute to a quick conclusion without the need for expensive litigation.
We are experienced commercial litigators and have invaluable experience in undertaking highly successful negotiated settlements.