An insolvent estate is where someone dies and there is not enough money in their estate to pay off their debts. Essentially, it’s where the liabilities exceed the assets.

If an estate is insolvent, the beneficiaries under the Deceased’s Will, or anyone entitled under the intestacy rules, will not receive anything because the estate’s creditors will need to be paid off. This includes any gifts of value, such as jewellery, as these should be sold to help meet any liabilities that are due.

s.271(3) Insolvency Act 1986 provides that:

“The court may dismiss the petition if it is satisfied that the debtor is able to pay all his debts or is satisfied—

(a)that the debtor has made an offer to secure or compound for a debt in respect of which the petition is presented,

(b)that the acceptance of that offer would have required the dismissal of the petition, and

(c)that the offer has been unreasonably refused..”

Mr and Mrs Hughes had granted a tenancy of a house to Mr Howell. He did not pay all of the rent and so they instructed Eleanor Solomon of Anthony Gold who issued possession proceedings. In September 2015 a possession order and money judgment were made against him. He did not satisfy the judgment debt and a bankruptcy petition was presented.

Lovers of Shakespeare will no doubt recognise the aforesaid phrase. As this is Shakespeare’s 400th birthday year, I thought it apt to borrow one of his most famous phrases.

The use of Shakespeare in a legal article may appear to many readers misplaced. However, the expression does, in my view, capture a serious dilemma facing creditors when trying to invoke what appears to be a cost-effective and quick way of recovering money.

After a delay of almost 6 years, it has now been confirmed that The Third Parties (Rights Against Insurers) Act 2010 will come into force on 1 August 2016.

Landlords typically have a number of obligations to fulfil, such as maintaining, repairing and providing insurance for the property the tenants inhabit. If the landlord is a company at risk of insolvency, however, or an individual nearing bankruptcy, then it is not safe for leaseholders to assume that these obligations will be met or that the freehold interest will necessarily pass to them. Leaseholders need to be aware of what they must do in such a situation in order to acquire the freehold interest from the landlord.

Last week I blogged about the Capital Gains Tax consequences of undervaluing property. This blog will look at another situation when undervaluing property or shares could lead to future exposure in an insolvency situation.

When a creditor to a company believes that that company is insolvent, it is open to that creditor to present a Petition for the compulsory liquidation of that company.  Section 135(1) of the Insolvency Act 1986 allows the creditor, on submitting a Petition for the winding up of a company, to apply for a provisional liquidator to be appointed.

Even someone castaway on a tropical island (say Curacao) will have heard of the Young divorce case which has been played out in the international press. The financial hearing starts today and is expected to last for 4 weeks. In one corner is Scot Young who was worth £400m in 2006 but says that his finances took a sharp downturn and led to his bankruptcy in 2010. In the other corner is his estranged wife who has been trying for many years to uncover a true picture of her husband’s financial circumstances.

In Hamilton v Hamilton [2013] EWCA CIV13 the Court of Appeal was asked to decide on whether it was appropriate to vary the terms of a Consent Order which provided for payment of a lump sum by a former wife to her former husband.

The Order required the wife to pay her husband £450,000 in 5 payments.

The wife paid a total of £240,000 by which time her business had been placed in administration and she was unable to make any further payments.