In Focus Collections


Can a dead person be made bankrupt?


It sounds like a classic pub-quiz question with an obvious answer, but a little knowledge will result in the correct solution


Dennis Schulman Chartered legal executive, Bradford Metropolitan District Council dennis.schulman @bradford.gov.uk


Where a debtor dies before a bankruptcy petition is presented, a petition for an insolvency administration order can then be put forward under the Administration of Insolvent Estates of Deceased Persons Order 1986. The administration of the insolvent estate


is dealt with under the provisions of this act which applies and amends certain provisions of the Insolvency Act 1986. There are six categories of people who


can present such a petition, including a creditor or joint creditors. In such a case, the court must be shown that it is reasonably probable that the estate is insolvent before an insolvency administration order will be granted.


Official receiver Between the presentation of the petition and the susequent making of an insolvency administration order, the court may appoint the official receiver as interim receiver to protect the assets. The official receiver's duties may be


restricted so care should be taken to ensure any such restrictions are observed. Otherwise, the official receiver, as interim receiver, has all the powers and duties of a receiver and a manager. The personal representative must


cooperate with the interim receiver and provide details of the assets which should be taken into immediate possession pending the hearing of the petition. Where there is no personal representative, or administrator, the official receiver should contact the closest surviving relative of the deceased debtor.


April 2017


Personal representative The personal representative has similar duties to that of a bankrupt in a bankruptcy. In addition to the duty to submit a statement of affairs, they must notify the official receiver of any assets which may be claimed for the estate by the trustee, provide an inventory of the estate to the official receiver, attend on the official receiver as reasonably required, and provide information regarding


the assets, liabilities, and affairs of the deceased debtor. The official receiver becomes receiver


and manager when the insolvency administration order is made, and control of the estate is removed from the personal representative on that date. They have the normal duties of a receiver


and manager, or trustee in bankruptcy. In addition, if the official receiver is trustee, they must have regard to any claim made by the personal representative in respect of reasonable funeral, testamentary, and administrative expenses incurred. These claims have priority over the


preferential debts, but are only payable from the estate balance if it is in credit after all administrative expenses of the insolvency administration order have been paid. The official receiver should take account of


such a claim before making any distribution to creditors. The official receiver has no statutory duty to investigate the affairs of the deceased debtor unless they think fit. This brief snapshot was written before


the Insolvency (England and Wales) Rules 2016 came into force. These new rules still allow a petition to be presented, but presenting a bankruptcy petition does not come cheap. Any potential creditor should consult


The official receiver has no statutory duty to investigate the affairs of the deceased debtor unless they think fit


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their legal representative before a petition is presented, and undertake a cost-benefit analysis to see if enforcement by this method is viable. It would make a spellbinding pub story –


how I recovered money from beyond the grave! CCR


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