Evicting the disabled spouse of a bankrupt person

29 Jan 2018

When a person is declared bankrupt and the trustees in bankruptcy (‘TiBs’) apply for an order for sale of the bankrupt’s home under the Trusts of Land and Appointment of Trustees Act 1996, the matter is governed by s 335A of the Insolvency Act 1986. In exercising its discretion whether to order sale, the court is directed to consider the conduct and needs of the bankrupt’s current or former spouse/civil partner, the needs of any children and all the circumstances except the needs of the bankrupt. Where the application is made more than a year after the vesting of the property in the TiBs, the court must ‘assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations’ (s 335A(3)). The recent appellate judgment in Pickard v Constable [2017] EWHC 2475 (Ch) is a reminder that, even in the case of severe disability of the bankrupt’s spouse rendering the circumstances exceptional, a temporary postponement of sale is often the best that can be hoped for.