What is the role of the Official Receiver and Trustee in a bankruptcy process?
January 17, 2020
The Official Receiver (OR) and Trustee both play key roles in a bankruptcy process, and are appointed by the Department for the Economy. The Official Receiver is a civil servant working for the Insolvency Service, and a Trustee is typically an accountant or solicitor authorised to carry out their duties by a regulatory body.
So what roles do the Official Receiver and the Trustee play in a bankruptcy process?
The Official Receiver’s role in bankruptcy
When a bankruptcy order is issued, the Official Receiver’s role is to protect the assets of the bankrupt’s estate, undertake investigations into the circumstances surrounding the bankruptcy, and if an independent Trustee isn’t appointed, to administer the bankruptcy process itself.
Protection of assets
The OR’s role in protecting assets is an important one. Safeguarding creditor interests is a primary aim during bankruptcy, and the Official Receiver must ensure the assets won’t be sold for less than their true value, hidden, or otherwise disposed of in a way that lessens returns for creditors.
The Official Receiver’s investigations
The Official Receiver holds significant power in investigating how the bankrupt person has reached this financial position, and will interview the bankrupt person to find out more about their financial history and current situation.
The Official Receiver will contact any and all financial institutions with which the bankrupt had dealings, including pension companies, landlords, and solicitors, to establish whether any dishonesty or criminal activity has taken place. Once their investigations are complete, the Official Receiver sends a report to the Secretary of State, detailing their findings.
What is the Trustee’s role in bankruptcy?
The role taken on by the Trustee in a bankruptcy procedure ensures that creditor returns are maximised, and that payments are made in the statutory order. The Trustee is typically an accountant or solicitor who is authorised by their regulatory body to administer bankruptcies and other insolvency procedures.
Once appointed, the Trustee takes control of the bankrupt’s assets, sells them, and distributes the funds to creditors according to a strict hierarchy. A crucial element of the Trustee’s role is to ensure that a fair value is assigned to the assets, and that they’re sold with a view to maximising creditor returns. This is particularly important as far as unsecured creditors are concerned, as they typically receive very little from a bankruptcy case, if any return at all.
Administering the bankruptcy process
The Trustee also holds significant authority when administering a bankruptcy, and if any transactions have been made that have deliberately undermined creditor interests, such as the sale of a property for less than its true value, then the Trustee has the power to restore the property to the bankrupt’s estate.
Northern Ireland Debt Solutions help people in Northern Ireland to escape debt, providing reliable professional advice and support. If you would like more information on bankruptcy or any other debt procedure, please contact one of our experts to arrange a free same-day meeting.
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