The Compendium

An undischarged Bankrupt cannot be a director of a company, or take part in the promotion, formation or management of a company. Also, they cannot be an IP, nor act as the trustee of a charity without permission of the court, or waiver from the charity’s commissioners.

Any surplus income in a Bankruptcy can be dealt with by an Income Payments Order (IPO) or Income Payments Agreement (IPA) which can outlast Bankruptcy, lasting for three years from the Bankruptcy Order.

Bankruptcy does not deal with all debts. For example, under a matrimonial settlement, maintenance arrears and periodic payments paid to the former spouse are not extinguished by a Bankruptcy.

The Bankruptcy will not touch those things necessary to satisfy the basic domestic needs of the Bankrupt and their family.

Any pension of the Bankrupt is exempt in Bankruptcy.

The Bankrupt has a duty to continue to cooperate with the Trustee in Bankruptcy, even after discharge.

The Trustee can take the main residence (often called the ‘matrimonial home’). Bankruptcy is not the favoured option, because the chances are that it will be sold under this option, although dependents will have rights of occupation for one year.

The Trustee will investigate antecedent transactions in a Bankruptcy.

[See ‘Individual Voluntary Arrangement’, ‘IVA’, ‘Income Payments Order’, ‘IPA’, ‘Income Payments Agreement’, ‘IPO’, ‘Trustee in Bankruptcy’ and ‘Bankruptcy Order’.]

Bankruptcy Debts

Bankruptcy debts are defined by the Insolvency Act 1986 as:

• Debts to which the Bankrupt is subject at the date of the Bankruptcy Order.
• Debts to which the Bankrupt becomes subject to post-Order due to a pre- Order obligation.
• Any interest provable on those debts.