Contact one of our advisors now Call 0800 088 6004

Postponing The Sale Of A Bankrupt's Home

In a High Court case earlier this year called Grant V Baker, the High Court overturned the indefinite postponement of sale ordered by a Judge seeking to protect a vulnerable individual living at the property.

Normally when parties are divorcing and a home is involved, and one party is bankrupt, the Court has to take into account a number of factors (if and when the Trustee in Bankruptcy applies to the Court for the sale of the home in order to satisfy creditors).
These factors include:

  • the needs of the children,
  • the needs and financial resources of the spouse,
  • the conduct of the spouse in terms of contributing to the bankruptcy,
  • and all the circumstances of the case.

Normally after one year of bankruptcy, it is assumed that the interests of the bankrupt’s creditors outweigh all other considerations (except in exceptional circumstances).
In this case at an Initial Hearing the Judge made an Order postponing the sale of the Bankrupt’s house for as long as his adult daughter resided there.  The daughter was 30 years of age although had a mental and emotional age of an eight or nine year old, suffering from global developmental delay, dyspraxia and OCD.  The Judge therefore felt that there were “exceptional circumstances” .
The High Court held that the Judge had erred significantly in exercising her discretion by ordering an indefinite postponement of the sale of the home and instead ordered that there be a further postponement of the sale for approximately 12 months.
The High Court decided that because the adult child Samantha had moved 8 years previous, a further sensitively handled move, was not something which would be unreasonable to inflict on her.
The High Court also felt that the wife’s share of the equity could fund the likely rental outlay for at least a decade.
Basically the High Court was of the view that the Judge was wrong to consider that there was no alternative to an indefinite suspension.

If you have been affected by any issues arising from this article then please contact Louise Scott at the Leicester Office on 0116 2517181 who is an Accredited Specialist with Resolution in the area of finances on Divorce.