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Applications for sale of the family home after one year of bankruptcy: A creditor's prerogative?

Applications for sale of the family home after one year of bankruptcy: A creditor's prerogative?

Pawlowski, Mark ORCID: 0000-0002-5473-5809 and Brown, James (2016) Applications for sale of the family home after one year of bankruptcy: A creditor's prerogative? NIBLeJ (Nottingham Insolvency and Business Law e-Journal), 3 (28). pp. 517-536.

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Abstract

Although the English courts appear to have assumed that a wife will not be prejudiced in raising a defence to possession of the family home based on her husband’s undue influence, regardless of the nature of the proceedings brought by the lender, it is evident that, in the majority of cases, this will not prevent the ultimate sale of the mortgaged property. In particular, where the application for a sale is made after one year from the vesting of the bankrupt’s estate in the trustee in bankruptcy, the court is to assume that the creditor’s interests prevail over all other considerations in the absence of exceptional circumstances. Given the practice of most lenders to wait until the expiry of the one year moratorium in order to avail themselves of the statutory presumption that the interests of creditors should prevail, the court will be bound in most cases to order a sale especially as the term “exceptional circumstances” in s.335A of the Insolvency Act 1986 has been given a very limited meaning in the case law. Only in extreme cases, it seems, will the wife’s voice prevail over that of the lender. This article, therefore, seeks to examine the court’s attitude to applications for a sale of the family home brought after one year of the vesting of the property in the debtor’s trustee in bankruptcy. It also considers whether arguments based on the wife’s right to respect for her home under Article 8 in Schedule 1 to the Human Rights Act 1998 have altered judicial attitudes in balancing the competing interests of the wife and her bankrupt husband’s creditors.

Item Type: Article
Uncontrolled Keywords: Family home, Sale, Bankruptcy, Creditors, Insolvency, Respect for the home, Human rights, Interests of wife
Subjects: K Law > KD England and Wales
Faculty / Department / Research Group: Faculty of Architecture, Computing & Humanities
Faculty of Architecture, Computing & Humanities > Department of Law
Faculty of Architecture, Computing & Humanities > Law & Criminology Research Group
Related URLs:
Last Modified: 19 Apr 2017 10:50
Selected for GREAT 2016: None
Selected for GREAT 2017: GREAT c
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/14119

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