A very unusual case, in which the Court of Appeal overturns a High Court decision which allowed a bankrupt to apply to suspend his own bankruptcy.

Play

The bankrupt wished to apply to suspend his own discharge from bankruptcy urgently, as the anniversary of his Bankruptcy Order was only days away. He wanted to propose an IVA whilst he was still undischarged, which would enable him to seek an annulment of his bankruptcy from the court under s.261 Insolvency Act 1986.

The Court of Appeal considered whether the High Court was correct in its finding that a bankrupt had standing to apply for the suspension of his own discharge from bankruptcy. It held that only a trustee in bankruptcy or an official receiver can apply, save in exceptional circumstances, and that this case was not exceptional.

A Trustee in Bankruptcy has no duty to comply with a bankrupt's request to co-operate when proposing an IVA. However, a bankrupt may ask the court to apply its discretion for an order directing the trustee to make an application (s.303(1) IA86), and here the Court of Appeal held that the High Court should have directed the trustee to apply to suspend the bankrupt's discharge from bankruptcy before it made an order suspending his discharge from bankruptcy.