Bankruptcy Offcial Receiver Still Owns Property After 13 Years?

OneOfThem12

Hello,

Hoping someone can help who perhaps understands how bankruptcy works.

A family member of mine was declared bankrupt in 2010. I believe they entered into a BRU which extended the bankruptcy by three years. At the time, the family home was not taken as there wasn't enough equity.

This year, with the rise of interest rates, my family member has had to search for a smaller property and has gone through the necessary process. However, it's come up from the buyer's solicitors on a Land Registry report that the property is not for my family members to sell and that it belongs to the official receiver - even after all the time.

The wording goes like this: 'No disposition of the registered estate is to be registered until the trustee in bankruptcy of the property of the bankrupt is registered as proprietor of the registered estate.'

My understanding is that; the official receiver has three years to claim any interest in the property, and after that point, the property is reverted back to the bankrupted. Is this correct and does anyone know how I can help my family member get this removed from the Land Registry documents so that the sale can proceed?

Any help would be much appreciated.

Thanks,

JCS1

A sale will only be forced if equity is £10k or above, below that a charging order may be placed on the property instead.

Was there an offer for the beneficial interest to be purchased at the time?

ToxtethO'Grady

Has your family member been discharged? If someone does not comply with the trustee or the OR they can suspend discharge indefinitely.

Minkym00

With respect to TO’G this isn’t related to discharge. The only person to remove this is  the trustee (be it the OR, or any trustee subsequently appointed). Your family member needs to contact the OR’s office that dealt with it (or any office as quite a few have been closed in the last few years) and ask them to deal with it. It may just be an oversight and should have been removed when the property was re-vested after 3 years. 

OneOfThem12

Minkym00 said:

With respect to TO’G this isn’t related to discharge. The only person to remove this is  the trustee (be it the OR, or any trustee subsequently appointed). Your family member needs to contact the OR’s office that dealt with it (or any office as quite a few have been closed in the last few years) and ask them to deal with it. It may just be an oversight and should have been removed when the property was re-vested after 3 years. 

Thanks for the reply. This is really helpful. My only concern was that I read yesterday if the interest wasn’t stated within three months then the three years starts from the date it is stated e.g the OR being aware of the sale. Do you know if this is possible? Thank you again. 

OneOfThem12

ToxtethO'Grady said:

Has your family member been discharged? If someone does not comply with the trustee or the OR they can suspend discharge indefinitely.

Thanks for the reply, yes they have been discharged. 

OneOfThem12

JCS1 said:

A sale will only be forced if equity is £10k or above, below that a charging order may be placed on the property instead.

Was there an offer for the beneficial interest to be purchased at the time?

Thanks for the reply. I believe a charging order was placed on the property as there wasn’t any equity. I’m not sure if there was an offer at the time.

Minkym00

Yes the OR has 3 years from the time they become aware of the property in which to deal with it. And it sounds from your subsequent post that the OR did deal with it, by obtaining a charging order on the property due to the low value of equity at the time. There really shouldn’t be a problem then - when the property sells the mortgage company will be paid off first, then the OR as second chargeholder. You need to get hold of the OR, like I said, and an ask for a copy of the charging order so you know how much it as for. There will be statutory 8% interest applied to the value of the order.