Use It or Lose It: Insolvency Act 1986, s 283A - Family Law journal

JANE CAMPBELL Barrister 6 Pump Court

Bankruptcy has become an increasingly prevalent feature in ancillary relief proceedings. Many practitioners are familiar with the following scenario: husband and wife are co-owners of their home husband goes bankrupt and under Insolvency Act 1986 s 306: husband's interest vests in a trustee in bankruptcy. The matrimonial home has little value at the time so there is no application by the trustee to sell it. Husband and wife then continue to live there and over time start to believe that the trustee's lack of interest means the home is theirs. Many years later when the value of the property has increased the trustee reappears and applies for an order for sale.

It was to counter the perceived unfairness of this situation that the ‘use it or lose it' provisions for trustees in bankruptcy were introduced by the Enterprise Act 2003 and incorporated into the Insolvency Act 1986. Broadly speaking the position is that a trustee has 3 years to make arrangements to sell a matrimonial home or seek an order for sale...

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