The Insolvency Service has published its policy, which came into effect on 1 December 2010, on realising a bankrupt's principal residence where the Official Receiver (OR) is appointed as the trustee in bankruptcy.
The policy provides that the OR will not take any steps to market the bankrupt's interest in the property for a period of two years and three months from the date of the bankruptcy order. However, the OR can accept any unsolicited offer in relation to the property if it is in the best interest of creditors. After the expiry of the two years and three months:
- if the bankrupt's interest in the property is less than £1,000, the OR will re-vest the property in the bankrupt
- if the bankrupt's interest in the property exceeds £1,000, the OR will take steps to realise that interest by steps which might include:
- allowing the bankrupt (or a third party connected with the bankrupt) to purchase the bankrupt's interest
- obtaining a charging order over the property
- appointing an independent insolvency practitioner as trustee to market and sell the bankrupt's interest in the property.
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