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Bankruptcy: trustee's right of inquiry

Published Wednesday, October 7, 2015

A trustee in bankruptcy has a duty to investigate the conduct and financial affairs of the bankrupt for the period leading up to his/her bankruptcy in order to establish the causes of the bankrupt's failure. This briefing paper provides an outline of the trustee's right of inquiry into the bankrupt's property and dealings, including his right to examine third parties. In the process, this paper will also summarise the general aims of the trustee.

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This briefing paper note provides an outline of the right of inquiry of a trustee in bankruptcy. It applies only to England and Wales. Scotland has its own legal procedure for individual insolvency known as sequestration.

Once a bankruptcy order has been made by the court, an official receiver or a private sector insolvency practitioner will be appointed trustee in bankruptcy (‘the trustee’). As at the date of the order, the bankrupt’s estate vests in the trustee. The main function of the trustee is to collect in and sell the bankrupt’s assets and to make payments to creditors in accordance with the Insolvency Act 1986 (as amended) (IA 1986) and the Enterprise Act 2002 (as amended). However, the trustee also has a duty to investigate the conduct and financial affairs of the bankrupt in order to establish the causes of the bankrupt's failure. As part of this inquiry, the trustee can also ask third parties for information. 

The purpose of this briefing paper is to provide an outline of the trustee's right of inquiry into the bankrupt's property and dealings, including his right to examine third parties. In the process, it will also summarise the general aims of the trustee in bankruptcy.

 

 

Commons Briefing papers SN05819

Author: Lorraine Conway

Topic: Insolvency

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