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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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I was declared personally bankrupt in Dec 1996. A caution

Resolved Question:

I was declared personally bankrupt in Dec 1996.
A caution nisi was placed on a property for approx £1500, jointly owned with my wife on 2/12/96 by a creditor and a charging order absolute on 3/2/97.
My wife purchased the beneficial interest in this property from the trustess in bankruptcy on the strict understanding that no other interests were to be left against the property.
The creditors now ask for an amount + interest on the original debt accrued to in excess of £7000.This is preventing an equity release on the proprty until resolved.

What is the way forward?
Does the charging order absolute stand in law even though I was bankrupt at the time of granting ?
The trustees in bankruptcy inform us that they requested the charge to be removed as they considered it invalid , yet it remains.
What can we do next ?
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hello, thank you for your question. My name is XXXXX XXXXX I can assist you with your question.

Customer:

Hi Tony

tdlawyer :

Did the court consider the bankruptcy when making the charging order absolute?

Customer:

No. All corespondence was in the hands of the trustee - KPMG -who do not appeared to have acted before the order absolute

tdlawyer :

s.346 of the Insolvency Act 1986 states that when execution is not completed by the time of the bankruptcy, it is invalid. In this case, where there is a nisi that hasn't become absolute by the time of bankruptcy, the charging order is invalid. The same section allows the court to override this effect, but it should only do so very exceptionally. It should have worked on the basis that it was invalid and then go on to consider whether it should do something different, which in 9/10 cases, it should not.

tdlawyer :

So, in my view, unless the court considered those provisions, it is likely to be invalid. The problem you have, of course, is that there is a court order and nobody can go behind that.

tdlawyer :

To change this, your trustee or you would need to apply to the court to have it removed.

tdlawyer :

Unless the judgment creditor agrees to release it.

tdlawyer :

You may have to go to court to challenge this, and because it's not a standard type of claim, I would encourage you to get the trustee to help you, or alternatively, get a solicitor on-board to help you.

Customer:

Any idea on timescale ?

tdlawyer :

I reckon you'd get a hearing in about 6 - 10 weeks from when you make your application. It does depend on the workload of the court concerned though, and they're all a little different.

Customer:

I don't think the creditor would agree to release it. KPMG requested some time ago but creditor has ignored this

tdlawyer :

Then I would encourage you to get a solicitor to help you with this and consider making an application.

tdlawyer :

They will need to "manage" the other side, the creditor, and hopefully by reference to appropriate legal authority convince them to release the charge.

tdlawyer :

Is there anything else you would like me to answer for you?

Customer:

Thank you Tony. You have been very helpful and we can see a way forward

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