Bankruptcy

5. The Trustee in Bankruptcy and the Bankrupt's Estate

On bankruptcy, the bankrupt's estate vests in the trustee in bankruptcy. The trustee in bankruptcy gets in, realises and distributes the bankrupt's estate to creditors. The trustee will take control of all books, papers and other records which relate to the bankrupt's affairs.

The bankrupt's estate will be made available for the benefit of his creditors in his bankruptcy. It comprises all property belonging to or vested in the bankrupt at the commencement of the bankruptcy. The following items are not included:

• (a) Tools, books, vehicles and other items of equipment necessary to the bankrupt for use personally by him in his employment or business;
• (b) Clothes, bedding, furniture, household equipment and provisions necessary to satisfy the basic domestic needs of the bankrupt and his family;
• (c) Property held by the bankrupt on trust for another person.

Any disposition of property (or payment in cash) made by the bankrupt during the period from the presentation of the bankruptcy petition to the vesting of his property in the trustee, will be void. The recipient may be required to return the property or cash.

In addition to the normal asset realisations undertaken by the Trustee, he has a wide range of powers to investigate events which took place prior to the Bankruptcy. For example the overturning of preferences, transactions at an undervalue (or gifts) form part of the Bankruptcy Estate. Whilst (for those made Bankrupt after 2001) Personal Pension Plans are exempt from the Bankruptcy, if excessive pension contributions were made into the plan prior to the Bankruptcy these can be recovered.