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Family Law

The leading authority on all aspects of family law

20 MAY 2009

BANKRUPTCY: Everitt v Budhram (A Bankrupt) [2009] EWHC (Ch)

(Chancery Division; Henderson J; 20 May)

The husband and wife were both bankrupt. Their trustee in bankruptcy sought an order for sale of the matrimonial home. The proceedings against the husband were stayed for lack of capacity. Under Insolvency Act 1986, s 335A(2) when considering whether to make an order for sale of a property which was or had been the home of the bankrupt, the bankrupt's spouse or civil partner, or former spouse or civil partner, the court was entitled to have regard to the needs and financial resources of the spouse, civil partner, former spouse or civil partner, but not to take account of the needs of the bankrupt. Taking into account the needs of the wife, the deputy district judge refused the trustee's application, but made an order charging the property with the trustee's professional and legal costs. The trustee appealed, arguing that the needs of the wife ought not to have been taken into account.

There was no apparent authority on the meaning of 'needs' within s 335A(2); the word should be given a wide interpretation. It could include financial needs of a bankrupt person, as well as a bankrupt person's medical, emotional and mental needs, but the deputy district judge had fallen into error in taking into account the needs of the relevant bankrupt, the wife. It had also been wrong to impose a charging order; it was not appropriate to replicate in bankruptcy what would have happened if a charging order had been obtained.

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