Tuesday 24 April 2018

Bankrupt will lose house despite wife living there - judge

'The woman challenged her inclusion in proceedings in which the bankruptcy official was seeking to apply to the High Court to sell their home in Co Wicklow' (stock photo)
'The woman challenged her inclusion in proceedings in which the bankruptcy official was seeking to apply to the High Court to sell their home in Co Wicklow' (stock photo)

Tim Healy

A judge has rejected claims that a bankrupt's house could not be sold because his wife was not bankrupt herself.

Ms Justice Caroline Costello said if it was the intention of bankruptcy legislation that the sale of a home only relates to the bankrupt's share of the property, "it would mean this provision would largely be unworkable".

She was giving judgment in an application by the wife of a man, who was declared bankrupt in March 2014.

The woman challenged her inclusion in proceedings in which the bankruptcy official was seeking to apply to the High Court to sell their home in Co Wicklow.

Both she and her husband asked the court to dismiss the proceedings by Chris Lehane, the official assignee in bankruptcy, seeking an order from the court permitting him to sell the family home.

The judge said Section 61 of the 1988 Bankruptcy Act expressly provides for the official assignee to apply to the court to sell the family home of the bankrupt or the bankrupt's spouse.

There was also nothing in the Act which said that this did not apply to co-owned family homes.

If it was the case that the official assignee could only apply for a sale order where both spouses were bankrupt, or the house was in the sole ownership of the bankrupt, it would mean an application would have to be made under other legislation for a bankrupt's interest in a property to be realised.

The court heard Mr Lehane had initiated the application just prior to the third anniversary of the date the man was declared bankrupt.

Under bankruptcy legislation, the bankrupt's interest in the family home, which had been transferred to the official assignee, would revert to the bankrupt if the application to sell was not made before the third anniversary.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Editor's Choice

Also in Irish News