Where a bankrupt person is not complying with the requirements of the bankruptcy laws the Official Receiver or the trustee may apply to the court for the suspension of the running period of his or her automatic discharge from bankruptcy. Should the court grant the application, it means that the bankrupt will not be automatically discharged from bankruptcy after twelve months, but will continue to be an undischarged bankrupt for a longer period of time.
An application for suspension should only be made where the bankrupt’s conduct has adversely affected the proceedings. Examples of such conduct would be non-attendance at scheduled meetings with the Official Receiver or with the insolvency practitioner trustee (IP), failure to deliver up property or failure to provide information to the Official Receiver or to the IP or willful default on an Income Payments Order or an Income Payments Agreement. Usually the Official Receiver seeks suspension for an undefined period until the bankrupt fulfills certain conditions such as clearing the shortfall on an Income Payments Order or Income Payments Agreement or submission of accounts.
The bankrupt’s discharge may also be suspended for a fixed period of time in certain circumstances but it cannot be suspended indefinitely: the suspension must be for a specific period or until certain conditions are met. The bankrupt has the right to know what he or she has to do to reinstate the running of the automatic discharge period or when the discharge will have effect.
When the bankrupt person has satisfactorily met the specified conditions, the court will lift the order suspending the discharge, following a report made to the court by the Official Receiver or by the IP. The bankrupt person may also themselves apply to the court for the lifting of the suspension order.
The Insolvency Service website provides much detailed information on the subject of the Suspension of Automatic Discharge from Bankruptcy as well as Bankruptcy Restrictions which we have already looked at in a previous article.
Article written by Paddy Byrne
08 /10 /2012