Repossession of a bankrupt's property will be ordered unless there are exceptional circumstances making such an order inappropriate.

In Brittain v Haghighat, the only asset in the bankrupt's estate was the family home. One of the bankrupt's children was severely disabled with quadriplegic cerebral palsy, requiring continuous care. The trustee applied for an order for possession under s336 and s337 Insolvency Act 1986.

The issue was whether the circumstances of the case were exceptional within ss336 and 337. The trustee's position was that if an order was made, the local authority would then have a statutory obligation to re-house the family as being unintentionally homeless. The bankrupt's wife contended that, in the circumstances, no order should be made.

The court agreed that the circumstances of this case were exceptional within the meaning of s336 and 337. An order for possession would be made, but deferred for a substantial period, (three years) or until, if sooner, three months after the child had ceased to permanently reside at the property.

The period of time allowed would permit the local authority to make provision for the wife and child to be re-housed in suitable accommodation and an orderly change to be made in the care arrangements for the child if necessary. The court considered this to be the best balance between the competing interests of the bankrupt's child and wife and his creditors, and was just and reasonable in all the circumstances.

Things to consider

It is clear, even in these circumstances, that the property will be realised for the benefit of creditors at some stage.