1. The Bankrupt’s dwelling house – a reminder that the 3 years “use it or lose it” for cases falling within the “transitional provisions” of the Enterprise Act 2002 runs out on 31 March 2007, less than 9 months time. The transitional provisions apply to all cases where a bankruptcy order was made on a petition presented prior to 1 April 2004, irrespective of when the bankruptcy order was made. This means that even for cases where the bankruptcy order was made after 1 April 2004 the 3 years expires 31 March 2007 as long as the petition was presented prior to 1 April 2004. Consequently, we recommend that IPs should check the petition dates on all their bankruptcy cases where the bankruptcy order was made post 1 April 2004.
2. Charging orders on matrimonial homes – just a reminder that a charging order only lasts for 12 years and needs to be enforced by possession and/or sale prior to expiry. Historically trustees obtained charging orders as part of the closing procedures to ensure that they obtained a certificate from IPCU regarding unrealised assets before holding a final meeting and then providing details of the assets to the OR. Whilst this is principally a problem for the OR, it may still cause problems for IPs where they are reappointed as trustee, or appointed trustee where another IP had previously acted, to deal with a matrimonial home that was protected by a charging order. Consequently we recommend that IPs should check their bankruptcy cases to make sure that they deal with any property protected by a charging order within 12 years of the granting of the order.
3. The impact of 1 and 2 – basically, you must deal with either a dwelling house under the 3 years use it or lose it provisions or a property within 12 years of a charging order! The consequences of failing to do so are likely to be a complaint to your authorising body - it will be treated seriously as it is a breach of the insolvency ethical principles in carrying out work to the required professional standard and will give rise to fitness and propriety issues – and a PII claim as your negligence will have given rise to a loss to the estate.
