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 case of Hull v Campbell serves as a reminder of an outmoded debt recovery procedure that needs to be modernised.

From 1 January 2011 the Insolvency Service has put the following changes into effect:

The Official Receiver (OR), as trustee of the bankruptcy estate, will no longer dispose of a bankrupt’s interest in a family home until two years and three months after the bankruptcy order is made, except if an offer is received which is in the creditors’ interests to accept.

At two years and three months a review will begin. In cases where the bankrupt’s interest in the property is valued at less than £1,000, steps will be taken to revest the property interest in the bankrupt.

In a decision that demonstrates a considerable degree of common sense, Lord Glennie has confirmed that in certain liquidations one can dispense with the usual requirement for a Reporter to be appointed to consider a liquidator's accounts. The decision forms part of an Opinion issued by Lord Glennie in relation to the winding-up of Park Gardens Investments Limited ("the Company").

The court has held that a statutory demand is valid despite the high default interest rate on an underlying loan.

In Gulf International Bank v Al Ittefaq Steel Products Co and others [2010] EWHC 2601 (QB), the High Court set out the factors that must be taken into account by the court when exercising its discretion to extend time for payment of sums due following an admission.

Introduction

Against the backdrop of the recent sheriff court decisions regarding the need to appoint a Court Reporter even in cases where the assets are insufficient to meet the IPs' fees, the Court of Session has taken an innovative approach to approving IP fees without the need to appoint a court reporter.

Background

Commercial sellers need to be particularly careful when purporting to sell property with vacant possession. In a recent case, Area Estates Limited v Weir (2010), Area Estates tried to sell a site to Weir, telling Weir that Area’s former tenant had surrendered its lease, so that Area could sell with vacant possession.

The law has for years tried to grapple with the Gordian Knot between protecting a debtor’s assets for realisation and distribution to his creditors and protecting third parties who enter into transactions with the debtor after the bankruptcy process has been initiated, completely unaware of that process.

In the continuing uncertainty of the current economic climate, and with a tough financial regime introduced by the new government, landlords may still find themselves faced with an insolvent tenant.