In Bankruptcy – Evicted From Property

Trustee in Bankruptcy Letter

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Here is an example of somebody who owned the property and went bankrupt in 2008. Over a three-year period they were evicted from their property and the property was sold.

XX XX 2012

Dear Sirs

XXXX – In Bankruptcy
Croydon County Court No. XXXX

I was appointed Trustee in Bankruptcy of the above on 3 May 2011 following a Bankruptcy Order on XX XX 2008 as a result of a creditors petition presented to the Court on XX XX 2008.

I now enclose my final receipts and payments account in the above matter and present my final report as follows.

Receipts and Payments Account

The final receipts and payments account is showing a negative balance of -£1387.00. In accordance with rule 6.137 (2) the Insolvency Act 1986, I have reconciled the accounts with that which is held by the Secretary of State in respect of the bankruptcy.


Interest in Property

The debtor held the sole interest in a property at (address). The Official Receivers agent valued the property on a drive-by basis at £315,00. However, local agents we assess the valuation to be in the region of £280-300,000 following an internal inspection. The property was subject to a mortgage in favour of Acenden in the region of £268,500.

Lawyers were instructed to assist with the eviction of Ms XXXX in order to octane vacant possession in preparation for the sale.

Initial offers were disappointingly only in the region of £250-260,000 but that’s eventually an offer of £285,000 was received. However, following the cost of sale and eviction they were still shortfall to the charge holder and I was therefore unable to accept the offer without first negotiating with Acenden. The negotiations resulted in Acenden approving the cost of sale and accepting a shortfall in order that the sale could go ahead,

Petition Costs

Preferential Creditors

I have not received any preferential creditor claims.

Unsecured Creditors
I received 8 unsecured creditor claims totalling £19,895.95

I have not sought to agree any class of creditor claims as there are insufficient funds with which to pay a dividend.

Trustees Remuneration

My fees as Trustee for administering the bankruptcy was approved at a meeting of creditors held on XX XX 2012 on a time cost basis over time spent by myself and my staff. Time costs incurred totalled £13,160 and although I have not received any remuneration from the Bankruptcy estate, I have received £7500 from sale proceeds which was agreed by the charge holder in respect of costs incurred dealing with the possession and sale of the property.

The balance, together with any further time expended on this case, will be written off upon closure. The time spent to date is shown on the attached analysis,which includes current billing rates.

With regard to the resolution on fees, guidance notes issued by R3 can be found on the R3 website on the following link:- selecting Guide to Trustee in Bankruptcy Fees. Alternatively please contact this office should you require a copy.

Final Meeting of Creditors

I enclose notice of the final meeting of creditors, at which this report will be presented. It is not necessary for you to attend the meeting unless you wish to do so. If it is your intention to attend please advise me at your earliest opportunity. Alternatively there is a proxy form attached for you to complete and return.

Here are the actual letters regarding the Trustees involvement in the Bankruptcy:

Trustee in Bankruptcy Letter

Trustee in Bankruptcy Letter 1

Trustee final Receipts And Payments Account

Time Cost Summary Bankruptcy

Proxy insolvency act 1986 form 8.4Notice to creditors of meeting of creditors



In Bankruptcy – Evicted From Property — 1 Comment

  1. Afterthought:

    This seems to be a great way of making money when there is in theory non available.

    Somebody tell me that I am wrong in what I am about to write?

    In this particular case the property was solely owned by the person going bankrupt. If this is the case then the trustee will make an entry at the Land Registry Office for a restriction order. A restriction is placed automatically when a bankruptcy order is made and this means that the bankrupt is no longer the legal owner of the property and therefore no longer has the right to sell it. It is only the trustee that can now sell the property.

    The trustee now has the power to evict the once property owner! The trustee can now place the property on the open market for sale. My understanding is that they have to ensure that the property is fairly marketed for a period of no less than 30 days. After this time the price can be reduced for a quick sale.

    Obviously the mortgage company will not be receiving any mortgage payments after the eviction faze. Of course the trustee will negotiate with the mortgage company to sell at the best possible price. He would also inform the mortgage company of his fees for doing this.

    I get the feeling that the mortgage company has very little option, unless it wants to make more losses, than to accept the proposal made by the trustee.

    So the end result is:

    Trustee – makes a tidy £7500 from the sale, of course highlighting that they made a loss because they were due £13,000.

    Official Receiver – remuneration of £1,300

    Mortgage Company – I don’t pretend to understand the tax system, but I have been told that they will not suffer because of this loss.

    If I am wrong about the above, please feel free to shoot me down.

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