Insolvency Act 1986, section 283A

Bankrupt’s home ceasing to form part of estate

Part IX Bankruptcy

(1)This section applies where property comprised in the bankrupt’s estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of—

(a)the bankrupt,

(b)the bankrupt’s spouse [F710 or civil partnerF710] , or

(c)a former spouse [F711 or former civil partnerF711] of the bankrupt.

(2)At the end of the period of three years beginning with the date of the bankruptcy the interest mentioned in subsection (1) shall—

(a)cease to be comprised in the bankrupt’s estate, and

(b)vest in the bankrupt (without conveyance, assignment or transfer).

(3)Subsection (2) shall not apply if during the period mentioned in that subsection—

(a)the trustee realises the interest mentioned in subsection (1),

(b)the trustee applies for an order for sale in respect of the dwelling-house,

(c)the trustee applies for an order for possession of the dwelling-house,

(d)the trustee applies for an order under section 313 in Chapter IV in respect of that interest, or

(e)the trustee and the bankrupt agree that the bankrupt shall incur a specified liability to his estate (with or without the addition of interest from the date of the agreement) in consideration of which the interest mentioned in subsection (1) shall cease to form part of the estate.

(4)Where an application of a kind described in subsection (3)(b) to (d) is made during the period mentioned in subsection (2) and is dismissed, unless the court orders otherwise the interest to which the application relates shall on the dismissal of the application—

(a)cease to be comprised in the bankrupt’s estate, and

(b)vest in the bankrupt (without conveyance, assignment or transfer).

(5)If the bankrupt does not inform the trustee or the official receiver of his interest in a property before the end of the period of three months beginning with the date of the bankruptcy, the period of three years mentioned in subsection (2)—

(a)shall not begin with the date of the bankruptcy, but

(b)shall begin with the date on which the trustee or official receiver becomes aware of the bankrupt’s interest.

(6)The court may substitute for the period of three years mentioned in subsection (2) a longer period—

(a)in prescribed circumstances, and

(b)in such other circumstances as the court thinks appropriate.

(7)The rules may make provision for this section to have effect with the substitution of a shorter period for the period of three years mentioned in subsection (2) in specified circumstances (which may be described by reference to action to be taken by a trustee in bankruptcy).

(8)The rules may also, in particular, make provision—

(a)requiring or enabling the trustee of a bankrupt’s estate to give notice that this section applies or does not apply;

(b)about the effect of a notice under paragraph (a);

(c)requiring the trustee of a bankrupt’s estate to make an application to the Chief Land Registrar.

(9)Rules under subsection (8)(b) may, in particular—

(a)disapply this section;

(b)enable a court to disapply this section;

(c)make provision in consequence of a disapplication of this section;

(d)enable a court to make provision in consequence of a disapplication of this section;

(e)make provision (which may include provision conferring jurisdiction on a court or tribunal) about compensation.F709]

Definitions used in section 283A 1

agreement

4 For the purposes of sections 72B and 72E and this Schedule “agreement” includes an agreement or undertaking effected by—

(a)contract,

(b)deed, or

(c)any other instrument intended to have effect in accordance with the law of England and Wales, Scotland or another jurisdiction.

Defined in Sch.2A para.4 · see it in the full Act

(2) “Agreement” includes any agreement or undertaking effected by—

(a)contract,

(b)deed, or

(c)any other instrument intended to have effect in accordance with the law of England and Wales, Scotland or another jurisdiction.

Defined in Sch.ZA1 para.19(2) · see it in the full Act

Cases considering section 283A 33

Sciortino v Beaumont

[2021] EWCA Civ 786 · 25 May 2021Interprets

Section 283A(1) identifies the statutory regime for a bankrupt's interest in a dwelling-house that was the bankrupt's sole residence. The Court used that setting to analyse the re-vesting provisions. (see paras [14]-[15]) Section 283A(2) provides for re-vesting after three years. The Court used it to distinguish the absence of a later statutory re-vesting mechanism from the separate question whether court orders had reversed the effect of dismissal. (see paras [14]-[15]; [98]) Section 283A(3) contains exceptions preventing automatic re-vesting, including specified trustee applications. The Court used it to identify the statutory effect attributed to the applications for possession and sale. (see paras [13]-[15]) Section 283A(3)(b) covers a trustee's application for an order for sale and was part of the statutory basis for the dismissal argument. (see paras [14]-[15]) Section 283A(3)(c) covers a trustee's application for possession and was part of the statutory basis for the dismissal argument. (see paras [14]-[15]) Section 283A(4) provides for re-vesting on dismissal of specified applications unless the court orders otherwise. The Court accepted that the statutory effect depends on the integrity of the dismissal order: if it is set aside, the proceedings cannot properly be treated as dismissed for this purpose. (see paras [15]-[16]; [28]; [98]-[100])

Blemain Finance Ltd v Goulding

[2013] EWCA Civ 1630 · 17 December 2013Limits

Applies the requirement that the property be occupied as the applicant’s sole or principal residence at the relevant bankruptcy date. Because occupation began only in 2005, the claim had no real prospect of success. (see paras [5]; [6]) The alternative argument that the three-year period ran from the trustee’s later knowledge did not improve the prospects of appeal, because the required residence was not established at bankruptcy. (see paras [5]; [6])

Stonham v Ramrattan & Anor

[2011] EWCA Civ 119 · 16 February 2011Limits

The section applies only to an interest vested in the bankrupt at the commencement of bankruptcy and thereby comprised in the estate. It does not extend to a possible claim to recover third-party property under section 339. (see paras [46]–[51]) An interest in a qualifying dwelling-house falls within the subsection only where it was vested in the bankrupt when bankruptcy commenced and consequently entered the bankruptcy estate. (see paras [47]; [51]) Re-vesting requires an interest first to be comprised in the bankruptcy estate. The subsection does not transfer property directly from a third party to the bankrupt after a recovery claim. (see paras [39]–[41]; [47]) The listed steps which prevent re-vesting presuppose an interest already comprised in the estate. They indicate that a possible recovery claim against a third party is outside section 283A. (see para [46]) A trustee becomes aware of the bankrupt’s interest when aware of an interest already vested in the estate, not merely of facts supporting a possible claim to recover third-party property. (see paras [48]–[51]) Cited only.

13 more judgments, and what each says about section 283A, are in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F709S. 283A inserted (1.4.2004) by 2002 c. 40, ss. 261(1), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))
  2. F710Words in s. 283A(1)(b) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 113(a); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))
  3. F711Words in s. 283A(1)(c) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 113(b); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications

  1. C974S. 283A modified (1.7.2005) by S.I. 1994/2421, Sch. 4 Pt. II para. 28A (as inserted (1.7.2005) by S.I. 2005/1516, art. 9(4))
  2. C975S. 283A(4)-(9) applied (with modifications) by 2002 c. 40, ss. 261(10), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))