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Thank you to Ashley for his permission to use the article.
If at the time you went bankrupt you owned a share of any property in the UK this applies to you.
How the 'protracted realisation unit' works and what the effects are on discharged bankrupts and their spouses:
1. The protracted realisation unit is the office of the Official Receiver. The Official Receiver is a civil servant in The Insolvency Service and an officer of the court. He (or she) will be notified by the court of the bankruptcy or winding-up order. He will then be responsible through his staff for administering the initial stage, at least, of the insolvency case. This stage includes collecting and protecting any assets and investigating the causes of the bankruptcy or winding up.
2. Over the next year or so, some people are going to be in for a shock when, out of the blue, they receive a letter from a trustee in bankruptcy inviting the occupier to purchase the trustee's interest in their home.
3. These people are discharged bankrupts who became bankrupt at a time when property values had slumped and properties were in negative equity.
4. By law , the property vested in the trustee at the time of the bankruptcy has remained with the trustee ever since.
5. From about 1993, the Official Receiver offered to sell his interest in the property (which was worthless) for a nominal sum of £1. This offer was to the bankrupt or the bankrupt's spouse .
6. However, some people later complained that they did not receive the documentation containing this offer otherwise they would have accepted it.
7. At the time of bankruptcy, the administration of the bankrupt's estate was completed, and he is discharged after 3 years and the interest in the property was referred to the Protracted Realisations Unit of the Official receiver in Birmingham.
8. The PRU specifically deals with assets which cannot be disposed of, for example because there is negative equity in the property.
9. The PRU is now sending all of these cases out to private sector trustees so that they can realise the interest in the properties and pay dividends to creditors.
10. The new Enterprise Act means that if a trustee does not take steps to realise his interest in the property within 3 years from the date of bankruptcy, the property automatically belongs to the discharged bankrupt.
"The new provisions will ensure that the trustee can only realise his interest in the bankrupt's home during the three years following bankruptcy, be it bust or boom. This ensures that the bankrupt really does get closure on his bankruptcy and can put the whole matter behind him and carry on with his life."
I have spoken to discharged bankrupts trying to sell or re-mortgage their home but are unable to because of the official receiver's caution on the property. Many do not understand that the property is no longer theirs to sell and this is a difficult message to deliver.
If you are reading this and you have had a letter from a trustee you have to act and act now if you do not act they will apply for a sale order on your home.
You do not have time to spare.
Unfortunately every case has to be dealt with on a individual basis and there is very little information on the internet to help you.
I can help you to make informed choices of what you can done to reduce your payments to the trustee. Do not be under the impression that this will go away or that you will get away with paying a token payment as you will not.
I have contact details for solicitors, barristers and IPs that can help you as well as answering your questions. If you have not had a letter but think the property may be vested in the trustee ask and act now and it could save from the above.
If at the time you went bankrupt you owned a share of any property in the UK this applies to you.
How the 'protracted realisation unit' works and what the effects are on discharged bankrupts and their spouses:
1. The protracted realisation unit is the office of the Official Receiver. The Official Receiver is a civil servant in The Insolvency Service and an officer of the court. He (or she) will be notified by the court of the bankruptcy or winding-up order. He will then be responsible through his staff for administering the initial stage, at least, of the insolvency case. This stage includes collecting and protecting any assets and investigating the causes of the bankruptcy or winding up.
2. Over the next year or so, some people are going to be in for a shock when, out of the blue, they receive a letter from a trustee in bankruptcy inviting the occupier to purchase the trustee's interest in their home.
3. These people are discharged bankrupts who became bankrupt at a time when property values had slumped and properties were in negative equity.
4. By law , the property vested in the trustee at the time of the bankruptcy has remained with the trustee ever since.
5. From about 1993, the Official Receiver offered to sell his interest in the property (which was worthless) for a nominal sum of £1. This offer was to the bankrupt or the bankrupt's spouse .
6. However, some people later complained that they did not receive the documentation containing this offer otherwise they would have accepted it.
7. At the time of bankruptcy, the administration of the bankrupt's estate was completed, and he is discharged after 3 years and the interest in the property was referred to the Protracted Realisations Unit of the Official receiver in Birmingham.
8. The PRU specifically deals with assets which cannot be disposed of, for example because there is negative equity in the property.
9. The PRU is now sending all of these cases out to private sector trustees so that they can realise the interest in the properties and pay dividends to creditors.
10. The new Enterprise Act means that if a trustee does not take steps to realise his interest in the property within 3 years from the date of bankruptcy, the property automatically belongs to the discharged bankrupt.
"The new provisions will ensure that the trustee can only realise his interest in the bankrupt's home during the three years following bankruptcy, be it bust or boom. This ensures that the bankrupt really does get closure on his bankruptcy and can put the whole matter behind him and carry on with his life."
I have spoken to discharged bankrupts trying to sell or re-mortgage their home but are unable to because of the official receiver's caution on the property. Many do not understand that the property is no longer theirs to sell and this is a difficult message to deliver.
If you are reading this and you have had a letter from a trustee you have to act and act now if you do not act they will apply for a sale order on your home.
You do not have time to spare.
Unfortunately every case has to be dealt with on a individual basis and there is very little information on the internet to help you.
I can help you to make informed choices of what you can done to reduce your payments to the trustee. Do not be under the impression that this will go away or that you will get away with paying a token payment as you will not.
I have contact details for solicitors, barristers and IPs that can help you as well as answering your questions. If you have not had a letter but think the property may be vested in the trustee ask and act now and it could save from the above.
