Property issues in bankruptcy cases

The bankruptcy estate

Subject to some exceptions, the bankruptcy estate comprises all property belonging to or vested in the bankrupt at the date of the bankruptcy order. This also includes beneficial interests in property held under trusts.

In accordance with section 306 of the Insolvency Act 1986 (IA 1986), the bankruptcy estate immediately and automatically vests in the trustee in bankruptcy (trustee) on their appointment without any conveyance, assignment or transfer. The trustee will either be the official receiver or—more usually where there are more substantial assets to realise—an insolvency practitioner.

For further reading, see Practice Note: What assets vest in the trustee in bankruptcy and what steps does the official receiver or trustee in bankruptcy need to take?

Properties in bankruptcy

In many bankruptcies, the bankrupt's home will form the main—and sometimes only—realisable asset in the bankruptcy estate. Where that property falls within the scope of IA 1986, s 283A, the trustee has to take certain prescribed steps before the third anniversary of the date