Discharge From Bankruptcy

Discharge from Bankruptcy

January 2008

Introduction

1. What does "discharge from bankruptcy” mean?

When a bankrupt receives his/her discharge from bankruptcy he/she is generally no longer bound by the restrictions placed upon him/her by the bankruptcy order - unless he/she is the subject of a Bankruptcy Restrictions Order or has given a Bankruptcy Restrictions Undertaking (see paragraph 11 for more information).

Discharge from bankruptcy releases the bankrupt from his/her debts (except, for example, any relating to fraud, fines and maintenance payments). The assets which were part of the estate during the period of the bankruptcy remain under the control of the trustee and could be sold - even after discharge (although for the conditions relating to the bankrupt’s residential property see Case Help Manual part: Family Home).

A Fact sheet: Release and Discharge explaining the difference between release and discharge is available on the intranet on Technical Section’s homepage. The information on the fact sheet may be used as an aide in explaining the difference to bankrupts.

 

2. What is automatic discharge?

If a bankrupt is entitled to an automatic discharge there is no formal application or hearing at court necessary for discharge to be granted. This means that on the anniversary of the appropriate date, the individual is discharged from bankruptcy.

A bankrupt who is to be discharged automatically cannot make an application to the court for an earlier discharge. The only way out of bankruptcy before the automatic discharge/early discharge date would be to apply for an annulment of the bankruptcy order (See Case Help Manual part: Annulments for more information).

The official receiver may consider that the early discharge procedure is appropriate. This is covered in more detail in paragraph 4.

The Enterprise Act 2002 (EA2002) introduces a new section 279 to the Insolvency Act 1986 which states that a bankrupt will generally be discharged one year from the making of the bankruptcy order where that order is made on or after 1 April 2004. It should be noted that this will apply even to those cases where the bankruptcy order is a second or subsequent bankruptcy. For details of the transitional provisions applicable to those already bankrupt on 1 April 2004, see paragraph 9.

 

3. Certificate of discharge

Where a bankrupt is entitled to an automatic discharge under the terms of his/her bankruptcy, no formal certificate of discharge will be issued automatically by the court. If written evidence is required, the former bankrupt must apply to the court which dealt with the bankruptcy. A fee is payable to the court for the provision of a certificate of discharge and any additional copies.

In those cases where the bankruptcy order was made before 1 April 2004, the court will check with the official receiver to ensure that the bankrupt is entitled to an automatic discharge.

In cases where the bankruptcy order was made after 1 April 2004, generally the official receiver will not be required to provide confirmation of the date of discharge to the court as the court file should contain sufficient information to enable them to issue the certificate of discharge, without reference to the official receiver. However, if the court needs to issue an enquiry in post 1 April 2004 cases the official receiver should confirm the date of discharge. Further, where the bankrupt in question is subject to a bankruptcy restrictions order or undertaking, the official receiver should write to the bankrupt to remind him/her that discharge from bankruptcy does not remove the restrictions imposed by any bankruptcy restriction order/undertaking using form DISBR (DO73). The official receiver should also confirm to the court that this reminder has been given.

 

 4. What is early discharge?

In those cases where the order was made on or after 1 April 2004, section 256 of EA2002 allows the official receiver to cause the 12 month period of the bankruptcy to be reduced further by filing form EDNOT-Notice of Discharge at court stating that an investigation of the conduct and affairs of the bankrupt is unnecessary or concluded. Early discharge will only be appropriate in cases where an income review has been completed (but see the exception below), any investigation has been completed and all asset matters have been resolved to the satisfaction of the trustee (whether the trustee is the official receiver or an insolvency practitioner) within 10 months of the bankruptcy order. It is not necessary for all the assets to be realised within this timescale but the official receiver must be satisfied that the bankrupt has disclosed all information required from him/her regarding any assets (see also paragraph 7).

Before considering whether or not the early discharge procedure is appropriate 3 months must have passed since the report to creditors was issued. Firstly, in cases where the official receiver is trustee and there is no income payments agreement (IPA) or income payments order (IPO) a further review of the bankrupt's income must be completed. In exceptional circumstances it is not necessary for this to be done, for example, where the bankrupt's only source of income is disability, state or other benefits, and this situation is unlikely to change.

The official receiver should send a letter (EDREV) to the bankrupt enclosing an income and expenditure questionnaire (IPOQ). The bankrupt is required to complete and return form IPOQ within 14 days. If the bankrupt does not return form IPOQ within 21 days then, unless the bankrupt offers a reasonable explanation (at the same time as form IPOQ is returned) as to why he/she was unable to comply within the given time, the early discharge process should cease and the bankrupt will have to wait for the full 12-month period before obtaining discharge. Any case where the bankrupt has submitted form IPOQ after 21 days (comprising 14 days specified plus an additional 7 days to allow for postal delays and borderline cases) without an appropriate explanation should be referred to the examiner for further instructions.

If the bankrupt fails to return form IPOQ, or if the official receiver does not accept the explanation as to why the form has not been submitted within the specified time, the early discharge process should not be pursued and the bankrupt will have to wait for the full 12-month period before obtaining discharge.

The 3-month period following the issue of the report to creditors has been introduced to allay the fears of creditors that bankrupts could be discharged too early with little or no investigation of their affairs and the reasons for their failure. It also attempts to avoid any accusation of "post code discharge" with the suspicion that bankrupts in certain areas may be discharged later because of local resourcing issues.

The official receiver needs to be satisfied that all asset matters have been resolved to the satisfaction of the trustee, regardless of whether he/she or an insolvency practitioner is trustee. If an insolvency practitioner has been appointed as trustee then he/she (or more likely a member of his/her staff) should be telephoned by the case officer prior to sending out the notice of the official receiver's intention to file early discharge (form EDNCR), to find out whether there are any problems with the case which might lead the official receiver to the conclusion that early discharge should not be considered. A formal note of the telephone conversation should be kept on form EDTIP. If there are no matters arising, the file note need only record that fact and the name of the person spoken to in the insolvency practitioner’s office. Any matters brought to the attention of the case officer during the telephone call should be drawn to the attention of his/her line manager for discussion with an assistant official receiver who will arrange for matters to be followed up with the insolvency practitioner in writing.

As at all times during the life of a case, a record of all decisions made must be kept and evidenced. This will provide a clear audit trail of the decision-making process and will enable the official receiver to justify his/her decision should it become necessary in the future.

When the bankrupt's income has been reviewed (where necessary) and the official receiver is satisfied that all asset matters have been resolved, the official receiver may issue form EDNCR notifying the creditors and any insolvency practitioner trustee that he/she intends to file the early discharge notice at court with the result that the bankrupt will be discharged. Where the administration of the estate is complete, the official receiver may also notify creditors of his/her intention to apply for release as trustee at the same time as informing them of the bankrupt's possible early discharge. The creditors or the trustee have 28 days in which to respond to the letter but the official receiver should wait a further 7 days to allow for any late objections. Where there are no valid objections to the bankrupt's early discharge, the official receiver will file form EDNOT at court stating that an investigation into the bankrupt's conduct and affairs is unnecessary or concluded. The official receiver should be aware of the possibility that when a combined notice is issued, objections to the early discharge process may be lodged with the Secretary of State (in practice, Applications Support Team (Estate Accounts Directorate)) in error but they are nevertheless objections which should be considered as if they were lodged with the official receiver directly.

Where a case has been transferred to an RTLU the official receiver must ensure that any documentation or information (including e- mails and telephone calls) which would affect the early discharge process is forwarded immediately to the RTLU. If the whole case has been transferred, it will be for the RTLU to send out the early discharge notice to creditors. If the RTLU is only dealing with a protracted realisation, it will be for the originating office to deal with the early discharge process.

All objections to early discharge must be considered by the official receiver. The letter sent to the creditors (EDNCR) provides a list of the types of relevant misconduct that may be deemed a valid objection. Full details are also contained in Technical Manual Chapter 22 part 2 paragraph 22.15.

A valid objection to early discharge is one that has raised some queries/concerns that need to be resolved by the official receiver making some further queries and/or carrying out some further investigation into the case. This may only take a couple of hours or it may take a couple of months. Once resolved satisfactorily, the early discharge process should continue, assuming that this is within 10 months of the bankruptcy order. If not resolved satisfactorily it is likely that there will be some consequence e.g. further investigation possibly leading to an application for a BRO and/or statement of facts. The official receiver or insolvency practitioner trustee may also consider applying to suspend the bankrupt’s discharge (e.g. for non co-operation).

A valid objection to the early discharge process should not result in the official receiver taking no action other than stopping the early discharge process. However, it does not necessarily follow that every case with a valid objection will end up on the FI register with an application for a BRO and/or statement of facts being submitted.

It is for the official receiver to decide how to deal with objections. If an objection is not valid, the official receiver should notify the objecting creditor or trustee of the reasons for the rejection using form EDOBJ-Early Discharge Objection and allow 14 days for an appeal against the decision, before filing the early discharge notice (form EDNOT) at court.

Where information from a creditor is deemed useful by the official receiver and changes the investigation decision, the early discharge process will be put on hold and a further letter should be sent to the trustee or objecting creditor(s) to gather more information for the investigation. If appropriate, the case may be marked FI and put on the register. The official receiver should keep the objecting creditor informed of the outcome of any further investigation and inform the objecting creditor if the early discharge process is halted. The official receiver may consider issuing a further report to creditors if anything of significance is discovered.

If, within 10 months of the bankruptcy order, the official receiver’s investigation is subsequently concluded to the satisfaction of the official receiver and no misconduct has been found, the objecting creditor should be informed that the official receiver intends to file an early discharge notice. Once the 14 day appeal period has expired, and as long as no further objection letter received in this period, the notice of early discharge form EDNOT should be filed at court.

The official receiver must ensure that 35 days have elapsed since sending out the early discharge notice to creditors (EDNCR). If 35 days have not yet elapsed, the filing in court of form EDNOT must be delayed in case other objections are received. 35 days are set aside to allow 28 days for objections under Insolvency Rule 6.214A(2) and a further 7 days for any late objections.

The official receiver must send 2 copies of form EDNOT to court for filing. The court will endorse each copy of the form with the date of filing and return one copy to the official receiver. The official receiver must send the endorsed copy of the form EDNOT to the former bankrupt.

The bankrupt is discharged on the date that form EDNOT is filed by the court (i.e. the date on the court seal). The date of the bankrupt's discharge must be entered onto LOIS screen 25 as soon as the official receiver receives form EDNOT endorsed by the court.

The form EDNOT refers to the bankrupt's continuing obligation under section 333(1) of the Insolvency Act 1986. Post discharge the bankrupt still has a duty under section 333(1) to give the official receiver or insolvency practitioner trustee information as to his affairs. However, the bankrupt is not required to give notice under section 333(2) to the official receiver or insolvency practitioner trustee regarding after-acquired property once he/she is discharged.

 

5. Can the bankrupt object to the granting of early discharge?

The bankrupt has no legislative right to object to the granting of early discharge. The bankrupt may assert that he/she may prefer not to be discharged early, for example because he/she is concerned about incurring further debt or because he/she is involved in legal proceedings. However, the official receiver should proceed with the early discharge unless the bankrupt is making proposals for an IVA (See paragraph 6).

 

6. Should the official receiver proceed with early discharge if the bankrupt is entering into an IVA?

A discharged bankrupt is unable to propose an IVA in respect of the bankruptcy debts. If the bankrupt makes proposals for an IVA the official receiver should not follow the early discharge procedure.

If the official receiver becomes aware that an IVA will not be proceeded with and less than 10 months have elapsed since the bankruptcy order, then the early discharge procedure should be reinstated where it is otherwise appropriate.

 

7. Should the official receiver proceed with early discharge if the discharge will affect the realisation of an asset?

The official receiver should not follow the early discharge procedure where it is known that the early discharge will affect the realisation of an asset. For example, if the bankrupt is due to receive a lump sum from a pension policy on his/her 65th birthday, and that birthday falls between the date the early discharge might otherwise take effect and the date when the bankrupt would be discharged automatically then the official receiver should not follow the early discharge procedure but should ensure that the interests of creditors prevail and realise the lump sum.

 

8. Suspension of automatic discharge.

Where a bankrupt is not complying with the requirements of bankruptcy legislation the official receiver (or trustee) may still apply to court for the running of his/her automatic discharge to be suspended. This means that the bankrupt will remain an undischarged bankrupt for a longer period of time.

An application for suspension should only be made in instances where the bankrupt’s conduct has adversely affected the proceedings, e.g. non-attendance, failure to deliver up property or provide information to the official receiver or to an insolvency practitioner trustee (although in such cases the insolvency practitioner trustee might be expected to apply), wilful default on an IPO or IPA. Usually, the official receiver will seek suspension for an undefined period until the bankrupt fulfils certain conditions, for example making up the deficit on an IPO/ IPA or the submission of accounts.

A fixed term may be appropriate in cases where the bankrupt’s conduct has been unsatisfactory, but the official receiver believes that the bankrupt is genuinely not and never will be, in a position to provide proper explanations, accounts, etc. Also, in cases where the bankrupt’s non-co-operation has caused a considerable amount of extra work for the official receiver (e.g. deliberately misleading information or non-disclosure of assets) even though subsequent enquiries may have led to the discovery of all relevant facts, a suspension until proper disclosure by the bankrupt is not a viable proposition.

The bankrupt’s discharge can only be suspended for a specific period or until certain conditions are met and not indefinitely. It is important that the bankrupt knows what he/she has to do to reinstate the running of the discharge period or otherwise when the discharge will have effect.

Once the bankrupt has satisfactorily met the specified conditions, the order suspending the bankrupt’s discharge will be lifted following a report to the court by the official receiver or the insolvency practitioner trustee. The bankrupt may also make an application to court for the suspension to be lifted.

 

8a. Suspension of automatic discharge- IP trustee in office

(Added December 2011)

From the 1 January 2012 the official receiver will, in some circumstances, make application for the suspension of discharge in bankruptcy cases where an insolvency practitioner (IP) trustee is in office and he/she wishes to apply but has no funds available.

If an IP requires the official receiver to make a suspension of discharge application the IP will prepare a witness statement that complies with the requirements of rule 6.215(2) of the Insolvency Rules 1986 setting out the evidence in support of the application.  The signed and dated witness statement must be sent to the relevant official receiver for the case at least one calendar month before the bankrupt would otherwise be discharged.

An application will only be made if the official receiver is in agreement with the trustee that the order suspending the bankrupt’s automatic discharge should be sought and the witness statement is received at least one calendar month before the bankrupts automatic discharge date.

The official receiver should respond to the IP within three business days of receiving the witness statement confirming that he/she will be making application to court or otherwise outlining why he/she is not in agreement with the IP that the order should be sought.

Where the official receiver is in agreement he/she will make application to court, attend court and present the application.  The IP (or an appropriate member of the IP’s staff) shall attend court to give evidence if so required by the official receiver.  

 

9. Transitional provisions – Enterprise Act 2002

Where an individual is already bankrupt at 1 April 2004, the EA2002 may still operate so as to reduce the discharge period. For those first-time bankrupts where the bankruptcy order was made before 1 April 2004, there will be automatic discharge on either:

  • the date before 1 April 2005 on which discharge is due; or 
  • 1 April 2005, whichever is the soonest

This means, for example, that generally a bankrupt subject to a bankruptcy order made on 2 August 2001 would be discharged on 2 August 2004 as they would have been, notwithstanding EA2002. However, in the case of a bankrupt adjudged on 2 August 2002 who would have otherwise been discharged on 2 August 2005 the discharge date would be 1 April 2005.

This redresses the inequitable situation that could have existed in the case of an individual made bankrupt on 31 March 2004 who would not otherwise have been discharged until 31 March 2007, in contrast to an individual subject to an order made on 1 April 2004, who would be discharged after 12 months on 1 April 2005.

Existing bankrupts will not receive an individual letter regarding their amended discharge date.

In the case of those bankrupts not entitled to automatic discharge, discharge will depend on the reason why they do not qualify:

  • Where the bankrupt is a second time bankrupt and has previously been an undischarged bankrupt in the 15 years prior to the current bankruptcy and remains undischarged from the second bankruptcy, he/she will be discharged either on 1 April 2009 (5 years from the legislation coming into force) or any earlier discharge date ordered by the court after 1 April 2004. The bankrupt may still apply for discharge to the court 5 years after the date of the bankruptcy order if this falls before 1 April 2009. (For more information see Case Help Manual part: Second or Subsequent Bankruptcies. 
  • Where the automatic discharge was suspended prior to 1 April 2004 for failure to co-operate or the like, these provisions will not apply. 
  • Where, at 1 April 2004 a bankrupt was subject to an order suspending his/her discharge and subsequently complies with the terms of the order, the period of the bankruptcy remaining following an application by the official receiver to lift the suspension will be one year or the balance of the period remaining to run whichever is the shorter.

 

10. Bankrupt’s application for discharge

A bankrupt, who is not entitled to receive an automatic discharge, may apply to the court to be discharged from bankruptcy. When the bankrupt applies for his/her discharge, a hearing date will be fixed at court of which the official receiver must be given at least 42 days notice. The official receiver must file a report at court at least 21 days before this date, giving details of the bankrupt’s conduct, liabilities and any distributions made to creditors, etc. The official receiver must also send notice of the hearing to all creditors whose debts have not been satisfied and to any trustee who is still in office. This is done by sending form DNBKTA (Discharge - notice of bankrupt's application) at least 14 days before the hearing.

Upon a bankrupt’s application for discharge, the official receiver is obliged to report to the court regarding the following:

  • the bankrupt’s conduct during the proceedings 
  • the circumstances surrounding the present and any previous bankruptcy; 
  • the extent of any deficiency in the current and any previous bankruptcy; and 
  • particulars of any distribution made or likely to be made in the current bankruptcy or a statement that there has been or is to be no distribution. 

The report may also contain any other information which the official receiver feels should be brought to the court’s attention. Essentially, the report should be brief and concise, and any comments, arguments or expansions into detail, which add little or nothing to the basic facts, should be avoided. If the official receiver has come to the conclusion that the bankrupt’s conduct has been such as to justify the court refusing or granting an order, then a specific statement may be included to that effect but it is imperative that the official receiver does not make any recommendations in the report as to the terms of the order that is to be made by the court.

A copy of the report must be sent to the bankrupt and any trustee at least 14 days before the hearing. Should the bankrupt wish to dispute any information contained in the official receiver’s report, form LCRTB should be sent to him/her outlining the procedure for doing so. The bankrupt may, if he/she wishes, file a notice at court specifying the sections of the report that he/she intends to challenge. This must be done at least 5 business days (7 days where the petition was presented before 6th April 2010) before the hearing with a copy given to the official receiver (and any trustee) at least 4 days before the hearing. The official receiver may then wish to make a further report to the court and he/she or a member of staff must attend the hearing.

The court may make any one of the following orders:

  • grant an absolute order of discharge immediately and without any conditions
  • refuse to grant the discharge, or 
  • grant the discharge but subject to certain conditions, for example discharge granted subject to the payment of £400 payable at £50 per month commencing 1/3/2005. 

In the last example, the discharge would be effective only if the conditions were met i.e. payments made in full, as ordered. Should the bankrupt fail to do this, the official receiver can go back to court to have the order varied although this should seldom happen. It is the court’s responsibility to draw up the order and send copies to the bankrupt, any trustee and the official receiver (though in practice local courts may expect the official receiver to attend the hearing with a draft order).

As soon as possible after the discharge hearing, the official receiver should write to the (former) bankrupt reminding him/her of the terms of the order. Where a trustee is in office, the official receiver should arrange for the insolvency practitioner to do this. The letter should inform the bankrupt that if he/she does not obey the court’s order, application will be made for the order to be revoked.

If the bankrupt fails to adhere to the conditions set out in the order, before any application is made to court, the official receiver should require the bankrupt’s attendance to explain and where possible, remedy the default.

Certain expenses, costs and fees are payable to the official receiver in respect of a discharge application. The bankrupt should be provided with details of the amount required. The court will only fix a hearing date once it is satisfied that the requisite sum has been paid in advance to the official receiver.

 

11. Bankruptcy Restrictions Orders and Bankruptcy Restrictions Undertakings

The Enterprise Act 2002, whilst imposing a shorter term for bankruptcy, seeks to protect against the minority of bankrupts who abuse the system or whose conduct has been dishonest, reckless or otherwise culpable by introducing Bankruptcy Restrictions Orders (BROs) and Bankruptcy Restrictions Undertakings (BRUs). Where an individual is the subject of either a BRO or BRU, the restrictions imposed on an undischarged bankrupt, that would otherwise cease to apply after the 12-month period, will continue to apply.

BROs or BRUs operate so as to extend the period of restrictions for a bankrupt from one year from the date of the bankruptcy order (or less if the early discharge process is applied)for a minimum period of 2 years up to a maximum period of 15 years, from the date the BRO was made (or BRU given). The court will grant a BRO if it thinks it appropriate to do so having regard to the conduct of the bankrupt on the application of the official receiver acting on behalf of the Secretary of State. The application for a BRO must be made before the end of the one-year discharge period, unless the court agrees otherwise.

Alternatively, the bankrupt may consent to be bound by a BRU. This is an agreement between the bankrupt and the official receiver that the bankrupt agrees to the extension of the restrictions until a specified date. It is a binding agreement and operates in the same way as the court order. The bankrupt may apply to court for a BRU to be annulled or for it to cease to have effect before the agreed specified date.

In the same way as an undischarged bankrupt, who is the subject of a BRO or BRU, may not either obtain credit of more than the prescribed amount, or engage in business without disclosing his status, nor may he/she act as the director of a company. Further, there are certain restrictions that will no longer apply to an undischarged bankrupt but apply only to the subject of a BRO. For example, an undischarged bankrupt was previously prevented from holding office in local government or from acting as a school governor but this is no longer the case and only those who are subject of a BRO or BRU are precluded from such positions.

A register of BROs and BRUs will be maintained as part of the Individual Insolvency Register.

It should be remembered that a person subject to a BRO or BRU is still discharged from bankruptcy and the provisions of section 307 regarding after-acquired property do not apply post discharge, notwithstanding the restrictions imposed on them as a result of the order or undertaking.

 

12.  Gazetting and advertising discharge from bankruptcy

A discharged former bankrupt is entitled to request that notice of the discharge be published in the London Gazette (and also in the same manner as the bankruptcy order may otherwise have originally been advertised). Upon such a request, the official receiver is required to publish a gazette notice and any advertisement. The costs form part of the Administration Fee charged to the bankruptcy estate. In cases where the petition was presented after 6 April 2010, the former bankrupt must make the request for publication to the official receiver within 28 days of the date of the certificate or order of discharge. 

The Insolvency (Amendment) Rules 2010 has specified the content of these notices, and Word templates can be found in the ‘Forms to be used’ section. These forms should be completed fully to comply with the requirements of the rules. For further information please see the CHM part Publication of Insolvency Information.

In cases where the ‘early discharge process’ has been applied, an order of discharge must not be gazetted until form EDNOT – ‘Notice of Discharge Form 6.82’ has been endorsed by the court and returned to the official receiver.

 

Note

Once a bankrupt has been discharged, he/she should be referred to as the "former" bankrupt.

Where can I find out more?

Enterprise Act 2002 Sections 256 -259.

Enterprise Act 2002 Schedule 19

Insolvency Act 1986 Section 278-281

Insolvency Act 1986 Schedule 4A

Insolvency Rules 1986 as amended by The Insolvency (Amendment) Rules 2010 Rules 6.217 - 6.220

Technical Manual:

Chapter 5 Publication of insolvency information

Chapter 13 Enforcement of Duty to Co-operate

Chapter 22 Discharge

Chapter 25 Restrictions on Bankrupts

Case Help Manual:

Annulments, Rescissions and Recalls

Family Home 

Meetings – Part 5 General Meetings

Insolvency Practitioners - Appointment by the Secretary of State

Publication of insolvency information

Second and Subsequent Bankruptcies

Technical Section Homepage:

Technical Notice T27/06 - Calculating the date of discharge where an order suspending the running of the discharge period is lifted (Revised Guidance).

Forms to be Used:

Gazette Notice - Discharge Order. For word Template Click HERE

NFN1 – Notice for Newspaper – Discharge Order. For Word Template Click HERE

EDNOT - Notice of Discharge Form 6.82

EDREV -Early Discharge - Income and Expenditure review

IPOQ - IPO, Questionnaire

EDNCR - Notice of OR's intention to file early discharge notice

EDTIP- Record of telephone conversation with IP before starting early discharge process

EDOBJ - Early discharge objection

DNBKTA - Discharge Notice of Bankrupt's application

LCRTB - Letter covering reports sent to bankrupt

DISBR - Discharge letter to bankrupt where BRO/BRU in force

 

Click HERE to view the Flowchart for Early Discharge

 

Procedure

Early Discharge

This procedure only applies to those cases where the bankruptcy order was made on or after 1 April 2004

1 Where a suitable case has been identified, i.e. 3 months have passed since the RTC was issued, the investigation decision is NFI, an income review has been completed (if appropriate – see 2), all asset matters have been satisfactorily resolved (but not necessarily realised) within 10 months of the bankruptcy order and the decision to apply the early discharge process will not affect the OR's ability to realise an asset, then the early discharge process should be applied.

2 Where the OR is trustee and there is no IPA or IPO a review of the bankrupt's income must be completed by sending form EDREV enclosing an Income & Expenditure Questionnaire (IPOQ) to him/her. The bankrupt is required to complete and return this form within 14 days.

The exception to this would be cases where the bankrupt's only source of income is disability benefit, state pension or other benefits and this situation is unlikely to change.

If the bankrupt does not return form IPOQ within 21 days then, unless the bankrupt offers a reasonable explanation (at the same time as form IPOQ is submitted) as to why he/she was unable to comply within the given time, the early discharge process should cease.

Cases where the bankrupt has submitted form IPOQ after 21 days (comprising 14 days specified plus an additional 7 days to allow for postal delays and borderline cases) should be referred to the examiner for further instructions.

If the bankrupt fails to return form IPOQ, or if the OR does not accept the explanation as to why the form has not been submitted within the specified time, the early discharge process should not be pursued. The OR should not contact the bankrupt specifically to request an explanation as to why form IPOQ has not been submitted and the bankrupt will have to wait for the full 12-month period before obtaining discharge.

3 If an insolvency practitioner has been appointed as trustee the case officer should telephone his/her office prior to sending out form EDNCR to find out whether there are any problems with the case which might lead the official receiver to the conclusion that early discharge should not be considered. The telephone conversation should be recorded on form EDTIP. If there are no matters arising, the file note should record that fact and the name of the person spoken to. Any matters arising from the telephone call should be brought to the attention of the assistant official receiver who will arrange for matters to be followed up with the insolvency practitioner in writing.

4 When the bankrupt's income review has been completed (where appropriate) form EDNCR may be issued to the creditors and any insolvency practitioner trustee in office stating that the OR intends to file an early discharge notice at court with the result that the bankrupt will be discharged. The form provides a list of the types of relevant misconduct that may be deemed a valid objection. Also, if the administration of the estate is complete and the case is ready for closing the OR may notify creditors of his/her intention to apply for release as trustee at the same time. Creditors have 28 days to respond to the notice.

5 After the 28 day period has elapsed, the OR should wait a further 7 days to allow for any late objections. All objections to early discharge must be considered by the official receiver.

6 If an objection is invalid, the OR must notify the objecting creditor / trustee of the reasons for the rejection and allow 14 days for an appeal against the decision using form EDOBJ/EDOBJT.

7 Where an objection is received it is for the OR to decide how to deal with this. Where information from a creditor is deemed useful and changes the investigation decision, the early discharge process will be put on hold. If appropriate, the case may be marked FI and put on the register. The OR should keep the objecting creditor/trustee informed of the outcome of any further investigation and inform the objecting creditor/trustee if the early discharge process is halted. The OR may consider issuing a further RTC if anything of significance is discovered.

8 If, within 10 months of the bankruptcy order, the investigation is subsequently concluded to the satisfaction of the official receiver and no misconduct has been found, the objecting creditor/trustee should be informed that the official receiver intends to proceed with filing an early discharge notice. The creditor/trustee is allowed 14 days to appeal against the decision. Providing that no further objection letter is received in this period, the notice of early discharge (EDNOT) may be filed at court.

9 Prepare 2 copies of form EDNOT and send to the court for filing. The court will endorse each copy with the date of filing and return one copy to the official receiver. The bankrupt is discharged on the date that form EDNOT is endorsed by the court.

10 When form EDNOT is returned from court, the endorsed copy showing the date of filing must be sent to the bankrupt. Before doing so, a copy of the sealed form EDNOT should be taken and placed on the office file.

11 Note the bankrupt's date of discharge on LOIS (CA25).

Procedure- certificate of discharge

1 Receive form (Request for notification of earlier proceedings) from court.

2 Obtain the office file or check on LOIS (CA25) to see if the bankrupt is entitled to an automatic discharge.

3 Generally, in cases where the BO was made before 1 April 2004 and the individual was a first-time bankrupt he/she would normally be automatically discharged 3 years from the date of the bankruptcy order. The exceptions are either where the bankrupt's discharge has been suspended by the court or if he/she has had a previous bankruptcy within a given time period. Details of both scenarios are given in steps 4 and 5 below. The EA2002 has reduced the normal period of a bankruptcy to 12 months and introduced transitional provisions which may affect the discharge date of those individuals who were made bankrupt before 1 April 2004.

Thus, all first-time bankrupts were automatically discharged on:

either 1 April 2005, or

the date before 1 April 2005 on which discharge was due, whichever was earlier.

4 Where the bankrupt was subject to an order suspending his/her discharge period on 1 April 2004 and the bankrupt subsequently complied with the terms of the order, then the OR will make application for the suspension of discharge to be lifted and the bankrupt will be entitled to an automatic discharge one year after the date the order of suspension is lifted. The exception will be bankrupts who, at the date the order of suspension was imposed, had less than 12 months remaining of their original discharge period. In those cases they will be discharged at the end of the shorter period.

5 Where the bankrupt is a second time bankrupt and has previously been an undischarged bankrupt in the 15 years prior to the current bankruptcy and remains undischarged from the second bankruptcy, he will be discharged either on 1 April 2009 (5 years from the legislation coming into force) or any earlier discharge date ordered by the court after 1 April 2004. The bankrupt may still apply for discharge to the court 5 years after the date of the bankruptcy order if this falls before 1 April 2009. (For more information, see Case Help Manual part: Second and Subsequent Bankruptcies).

6 When you have ascertained the discharge details complete the form as follows:

  • If the bankrupt is entitled to an automatic discharge, complete part A of the form.
  • If the bankrupt is not entitled to an automatic discharge, complete part B.
  • If the bankrupt’s discharge has been suspended, endorse the form at part A with "DISCHARGE SUSPENDED [date]."

7 Obtain a signature on the form, as per the practice in your local office.

8 Take a copy of the signed form for the office file and return the original to court.

9 Where the bankruptcy order was made on or after 1 April 2004, and the court needs to issue an enquiry in post 1 April 2004 cases the official receiver should confirm the date of discharge. If the bankrupt in question is subject to a bankruptcy restrictions order or undertaking, the official receiver should write to the bankrupt to remind him/her that discharge from bankruptcy does not remove the restrictions imposed by any bankruptcy restriction order/undertaking using form DISBR (DO73). Confirm to the court that this reminder has been given.

10 Where an enquiry is received concerning a bankrupt's discharge check LOIS (CA25) to confirm the appropriate date of discharge.

Procedure – Gazetting and advertising an order of discharge

1 Receive a request from the former bankrupt requiring advertisement of his/her discharge. Check on LOIS (CA25) that the discharge has been granted.  Where petition was presented on or after 6 April 2010 the request must be made within 28 days of the certificate or order of discharge.

2 In cases where the ‘early discharge process’ has been applied, an order of discharge must not be gazetted until form EDNOT – ‘Notice of Discharge Form 6.82’ has been endorsed by the court and returned to the official receiver.

3 Prepare Gazette Notice – Discharge Order Word template and if previously advertised prepare form NFN1 – Discharge Order Word template.

For further information on gazetting and other advertising see CHM part – Publication of insolvency information

Procedure - Suspension of automatic discharge

(Amended April 2011)

1 Upon receipt of instructions to apply for the suspension of a bankrupt’s automatic discharge, contact the court to fix a hearing date for the application. Diarise and enter details of this on ISCIS ‘Hearing’ tab, a note should be created on this tab which should be used to record details and progress of the application.  Another note should be created on the ‘Notes’ tab (Note group ‘Other Matters’, note type ‘Other Matters for Attention’), this note should refer to the note within the hearing tab.

2 The examiner will draft the OR’s report to court. Arrange for 3 copies to be made of this (4 if a trustee has been appointed).

3 Prepare form LCRTB (letter covering reports sent to bankrupt) on ISCIS ‘Docs’ tab. The report should be sent to the bankrupt and any trustee so that it reaches them at least 21 days before the hearing date.  If possible the report should be sent with the application (see paragraph 5)   

4 Send a copy of the OR’s report:  

  • to court 
  • to the bankrupt attached to covering letter LCRTB  
  • place one on the office file. 
  • where appropriate, send one to the IP with form LCRTR (letter covering reports sent to trustee). 

5 The examiner will draft the OR’s application to court.  Three copies of the application should be sent to court with a covering letter requesting that the applications be sealed, a copy retained for the court file and the two other copies returned to the official receiver.

6 A copy of the application should be served on the bankrupt at least 14 days prior to the date that has been fixed for the hearing.  A ‘Certificate of Service’ (Court Form N215) should be completed to evidence that service has been effected and once completed a copy should be filed at court.  A pre-filled version of the form is available from the ‘Forms to use’ section (please see SODCERT).  

7 If the bankrupt disputes any part of the report he/she must give written notice to the court at least 5 business days (7 days if the petition was presented before 6th April 2010) before the hearing. A copy of this must be sent to the official receiver no later than 4 days before the hearing. Whenever a written objection is received from the bankrupt, it must be passed immediately to the AOR who will be attending the hearing.

At least 1 day before the hearing

8 Pass the file to the AOR who will be attending. If it is the practice in your office to provide the court with a draft order at the hearing, prepare this beforehand. Please refer any queries you may have regarding this to the B1.

After the court hearing

9 If the court has not ordered the suspension of the discharge then update ISCIS (‘Hearings’ tab) after which no further action is required.

10 Where the court has ordered for the suspension of discharge, obtain form 6.72 from court or if it is the practice at your office to provide this for the court, prepare 3 copies on ISCIS ‘Docs’ tab . A 4th copy will be required where there is a trustee in office and the BO was made before 1/4/2004. Send all copies to the court for sealing and request return of three copies. One copy is to be retained by the court for their file.

11 Upon receipt of the sealed orders (form 6.72) from court:  

  • send one to the bankrupt. 
  • place one copy on the office file. 
  • send one copy to the trustee (if appropriate).

12 Record details of the suspension of discharge on ISCIS ‘Hearings’ tab.