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Problem Areas in Bankruptcies - Guidance for Dealing with 'Difficult' or Vexatious Individuals - September 2016

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During a bankruptcy procedure, the Trustee in bankruptcy has a number of duties to fulfil. Amongst these is the duty to maximise returns to creditors, as well as a duty to respond to the bankrupt's queries during the process. In most bankruptcy cases, these two duties are performed with little difficulty or friction between them.

However, the two duties can and sometimes do conflict. Specifically, where a bankrupt or an associated person (such as his/her spouse or immediate family) is being uncooperative or deliberately disruptive, for example by continuing their grievances regarding the process or their disputes with creditors into the post-bankruptcy period, the Trustee will become involved in managing their expectations. This creates the situation where the Trustee may be drawn into continued dialogue and begin spending a lot of time dealing with the bankrupt, their spouse or other individuals, in order to fulfil his/her duty in responding to queries, but in the process of doing so, the associated costs increase - thereby reducing returns to creditors. 

Such cases can include the situation where the bankrupt is refusing to answer correspondence or to hand over assets, or is ignoring requests for information from the Trustee even where there are suspension of discharge provisions in place to compel the bankrupt to comply. It can also refer to a situation where the bankrupt (or his/her immediate family) is being persistently belligerent.  


Problem Areas in Bankruptcies - Protocol for IPs - Sept 2016 - Size: 259Kb Download
Ben LuxfordBen Luxford
Head of Technical
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