The Insolvency Service (IS) has published a consultation paper on reforming debtor petition bankruptcy and early discharge from bankruptcy. The proposed reforms, which are aimed at speeding up the procedure and lowering costs, are to:

In circumstances where a debtor lacks mental capacity to deal with a statutory demand and subsequent bankruptcy petition, the court will rescind or annul a bankruptcy order.

Where the Courts Service failed to notify the Land Registry of a bankruptcy petition with the effect that property was disposed of without a pending action having been registered, the trustee in bankruptcy had a right to claim damages.

The Insolvency Service has published its policy, which came into effect on 1 December 2010, on realising a bankrupt's principal residence where the Official Receiver (OR) is appointed as the trustee in bankruptcy.

The policy provides that the OR will not take any steps to market the bankrupt's interest in the property for a period of two years and three months from the date of the bankruptcy order. However, the OR can accept any unsolicited offer in relation to the property if it is in the best interest of creditors. After the expiry of the two years and three months:

The making of a bankruptcy order alone will not deprive a judgment creditor of a final charging order where it is obtained before the bankruptcy order is made.

A guarantor can be made bankrupt where the terms of the guarantee create a debt obligation.

To avoid an asset reverting to a bankrupt after the end of his period of bankruptcy, the asset must be realised. An assignment of a beneficial interest for a future price does not amount to a realisation.

A notice of intention to appoint administrators (a Notice), although not an absolute bar to making a final charging order, will generally act as a moratorium. This prevents creditors from taking steps to enforce their claims against a company without the permission of the court.

The courts have the power to and increasingly will make a civil restraint order where an individual persistently issues claims that are totally without merit.