Trustee in bankruptcy
The trustee in bankruptcy has a duty to take possession of any assets that will benefit your creditors, sell them and subsequently distribute the proceeds. The trustee may also take possession of any books and papers.
For basic information regarding the treatment of assets in bankruptcy see the assets in bankruptcy page.
Who is the trustee in bankruptcy?
The trustee in bankruptcy will either be:
- the Official Receiver who is administering your bankruptcy
- a licensed insolvency practitioner
Whether or not a licensed insolvency practitioner will be appointed as trustee in bankruptcy will usually depend on whether there are significant assets to be realised or realisation is likely to be complex.
Difference between the Official Receiver and trustee in bankruptcy
The Official Receiver is responsible for protecting your estate and investigating your behaviour and affairs. The trustee has the role described above.
What powers does a bankruptcy trustee have?
The bankruptcy trustee has a number of investigative and administrative powers so that your assets and bankruptcy can be dealt with effectively. Some of these powers require sanction of the court or the creditors and other powers do not require sanction.
For example, the trustee in bankruptcy can apply to the court for the redirection of your mail. The trustee can apply to the court to have any person believed to be in possession of your property to be summonsed for private examination. The trustee can request that the court issues a warrant for your arrest or the seizure of any property that belongs to the bankruptcy estate. The list goes on.
For these reasons it is important that you know how to conduct yourself during bankruptcy and what the consequences of bankruptcy will be for you.
Do I have to co-operate with the trustee in bankruptcy?
Yes but you do have rights. You have the right to challenge the decision of the trustee in bankruptcy by applying to the court. Whether or not you will succeed will usually depend on the acts of the trustee. For example, if he or she has acted fraudulently.
Remember that if you do not co-operate then your discharge from bankruptcy can be suspended and the trustee may exercise their investigative powers. If anything is found then this could worsen your situation. For example, if you have been concealing property then you may become liable for a bankruptcy offence. A bankruptcy offence is punishable by imprisonment or a fine or both.
Does the bankruptcy trustee have rules?
Yes. The trustee's duties and powers come from both primary and secondary legislation, mainly insolvency law. Their licensing body will also expect them to obey by their ethical guidelines. If you believe that the trustee in bankruptcy is operating outside of these guidelines then you can complain to that licensing body. As previously mentioned, if you are not happy with the decision or an act of the trustee then you can apply to the court to have the decision changed.
