3 year use it or lose it rule?

getonup

Hi everyone,
I wonder if anyone might be able to help with information about the three year use it or lose it rule that now applies to a bankrupt's home.

My partner and I were both declared bankrupt in Dec 2011 as a result of an Icelandic Bank going into administration in banking crisis Oct 2008.
We had both signed PG'S for a loan from the bank for our property development business.
We discovered that the administrators of the bank acted in very bad faith/fraudulently and sold the properties that we had nearly completed to parties connected to chief administrator himself.
They also then called in the P.G's and we fought our bankruptcies but were unsuccessful.

Sorry for preamble, but that is there to explain that we did not initially cooperate with our bankruptcy as we undertook extensive litigation in High Court (as litigants in person), which we lost; hard to believe but the litigation involved all sorts of irregularities and many of the judges involved were connected to the parties we were accusing of fraud.
Some high profile names were involved.

We were declared bankrupt in Dec 2011 but I only cooperated fully in 2013 but after my interview was told I would be indefinitely bankrupt until I repaid a disputed sum of £13k. During the interview the Deputy Official Receiver saw no reason why I would not be discharged.
I remain indefinitely bankrupt. My partner has refused completely to cooperate with OR and so too remains indefinitely bankrupt.

Finally...the question...does the 3 year use it or lose it rule apply to us? I.e is there a possibility that our house could be returned to us in Dec 2014, which is three years from bankruptcy order or does that not apply to us because of our situation?

Thank you in advance for taking the time to read this we have been through hell because of major fraud against us and just want to be able to protect our three young boys.

tigerfeet2006

What equity is there in the property?

getonup

Hi there thank you for your reply.
I am not certain but I live in London and house prices have gone crazy.
I think it would be between 100-150k. So enough for OR to sell.
But we have heard nothing and the three years will be up in Dec...

Hopeful1968

The three year property ruling only comes into effect from the date you fully comply with the Official Receiver. In this respect Dec 2014 would not be the three year date. Is there any equity in the property?

getonup

Hi there,
Thanks for replying.
Does the legislation not state it is the date upon which they become aware of the property?
Are you able to point me to the Insolvency rule that states the three years does not run until a bankrupt has fully cooperated?

Thanks for your help.

Hopeful1968

Hello, A quick Google search (Insolvency Rules - Property) shows

4. Exceptions to the three year period

a. Where a bankrupt has not disclosed his or her interest in a dwelling-house within the first 3 months from the date of the bankruptcy order, the 3 year timescale which the trustee has to deal with a bankrupt's interest, will begin with the date on which the official receiver or other trustee becomes aware of the property.

b. In exceptional circumstances, the trustee may apply to the court to extend the 3 year period. It is anticipated that such applications will be rare but may be appropriate in instances where, for example, the bankrupt discloses a property but withholds necessary information causing a delay in the procedure, or the bankrupt has vacated the property but despite the reasonable efforts of the trustee the sale is likely to be delayed beyond the 3 year period. It may also be necessary to apply for an extension of the three year period where the bankrupt’s interest is in a charging order over a ‘family home’ and that interest cannot be realised within the three year period.

c. Where the official receiver or other trustee has sent notice to the bankrupt that he or she considers that the continued vesting of the dwelling-house in the bankrupt’s estate will be of no benefit to creditors, or that re-vesting will enable a more efficient administration of the bankrupt’s estate.

Therefore they could use clause a). as non disclosure in the first 3 months as being unable to contact you to deal with this matter/non compliance.

getonup

Thank you Hopeful, that is the information we have discovered upon searching.
It is quite a grey area as with all things bankruptcy related.
We are not trying to hide anything but as victims of a fraud we have been fighting for justice for over 5 years and the idea that we could have our home taken after losing our business, our livelihoods, our reputations etc is beyond "just". We signed Personal Guarantees not imagining that the Bank itself would go bankrupt leaving us liable for its debts....one only imagines bankruptcy occurring in this situation if we could not service the loan, which we could have done had the Bank Administrators had not called in the PG'S (improperly).

Thank you to those who have read and replied