January 2011


43.3.2 Properties in the United States of America as assets of a bankruptcy estate

The Act provides that property, wherever it is situated in the world, forms part of the bankruptcy estate [note 1] [note 2], and the Act gives the trustee a power of sale over the property [note 3].

It is clear, therefore, that property in the United States of America (‘America’) belonging to the bankrupt would form part of the estate and should be realised as appropriate.


43.3.3 Potential difficulties in dealing with property in America

It is unlikely that the official receiver will be able to conduct any dealings in the property (including seeking to protect his/her interest in it) without first having the bankruptcy order and his/her power to act recognised by the American courts (see paragraph 43.3.4) and the costs of obtaining such recognition will need to be taken into account when deciding how best to deal with the property.


43.3.4 Recognition in America of the bankruptcy order and official receiver’s power to act

America has incorporated the provisions of the UNCITRAL Model Law into its bankruptcy legislation [note 4].

Full details of the scope of the UNCITRAL Model Law can be found in Chapter 42, Part 2 and advice regarding how it might be put to practical use by the official receiver is given in Chapter 43.0, Part 4.

In short, the provisions of the UNCITRAL Model Law create a streamline process for the recognition of a foreign proceeding (in this case the English proceeding is the foreign one) in another country in which the bankrupt has assets.


43.3.5 Ensure that value of property justifies application for recognition

It is unlikely that the official receiver will be able to make an application for recognition in America [note 5] [note 6] (see paragraph 43.3.4) without local legal representation (see paragraph 43.3.17) as the process requires a hearing and is sometimes opposed.

Before seeking to instruct a lawyer to undertake such an application, therefore, the official receiver should ensure that the value of the property (see paragraph 43.3.6) to the estate justifies the costs.


43.3.6 Ascertaining the value to the estate of a property in America

In simple terms, the calculation of the value of an American property to the estate involves the same process as would be required for a property in England and Wales (that is, the value of the property less any secured charges).  What may be more difficult is the obtaining of accurate information regarding value of the property and the amount and level of outstanding charges.


43.3.7 Obtaining information regarding the value of a property in America from the bankrupt

The most likely source of information regarding the value of the property will be from the information or documentation provided by the bankrupt, for example: 

  • Estimates of the value of the property made in the preliminary questionnaire or interview.
  • Documentation showing the purchase price.
  • Valuations provided during any re-mortgage process.


43.3.8 Other sources of information regarding the value of a property in America

As in the UK, there are websites that give the prices of properties that are for sale and, in some cases, the amount that houses were recently sold for.  Examples are given here:

It is possible that a local estate agent (which, in America, are called ‘realtors’) may be prepared to offer an opinion.  A realtor may be located by region on the following website:


43.3.9 Where it is necessary to obtain an accurate valuation

Where it is necessary to obtain an accurate value of the property the official receive may consider appointing the American equivalent of a surveyor (called an ‘appraiser’).  As this service is likely to attract a fee the official receiver should consider the necessity of the valuation against the likely benefit to the estate.  A appraiser may be located by regional search on the following website:


43.3.10 Establishing the position of charges against the property

It is likely that, as with a UK property, the official receiver will be able to establish what charges there are against the property from documentation or information provided by the bankrupt.

Assuming the identity of at least one of the secured chargeholders is known, they can be written to in the normal way [note 7] to obtain details of the amount outstanding under their charge and the identity of any other chargeholders.  Such an approach should be accompanied by a completed data protection act disclosure authority [note 8] to avoid any refusal to provide information under jurisdictional differences.


43.3.11 Establishing the identity of chargeholders where bankrupt’s information incomplete

Where the bankrupt’s information regarding the identity of chargeholders is incomplete or suspect, the official receiver may have no option than to seek information from official sources.

America does not have a national register of property such as the UK Land Registry.  Instead, responsibility for recording the ownership of, and charges against, land and property rests with individual counties (or parishes and census areas as they are known in Louisiana and Alaska respectively).

The official in the county with responsibility for recording and producing such information is known as the ‘recorder of deeds’.  Some of the recorders of deeds appear to be able to offer an on-line service, whereas other require postal or personal inspections of the register.  The information appears to be available without restriction.

America has over 3,000 counties, so it is not possible to give county-by-county guidance here.  Instead, the official receiver should attempt to approach the recorder of deeds directly with his/her information requirements, seeking advice from Technical Section as necessary.


43.3.12 Protecting the official receiver’s interest

The official receiver should write to the relevant Recorder of Deeds (see paragraph 43.3.11) and ask him/her to note the official receiver’s interest against the record of the property that they hold.

In addition, the official receiver should send the usual notice [note 9] to the mortgagees.


43.3.13 Dealing with property where it is worth the cost of realisation

Where the official receiver is able to establish that the value of the property to the estate is worth the cost of protection and realisation, he/she will need to appoint a lawyer (see paragraph 43.3.17) in America to both make application for recognition (see paragraph 43.3.4) and, also, deal with the conveyance of the property.

The property should have equity of at least $20,000 to make such an instruction worthwhile.


43.3.14 Transferring the case to the RTLU

Where the official receiver has successfully obtained an order for recognition (see paragraph 43.3.4), and protected his/her interest in the property (see paragraph 43.3.12) (including notifying the mortgagees of his/her interest in the property – see paragraph) he/she may transfer the property to the RTLU in the usual manner.

This assumes the property has, or is likely to achieve equity at a level that would make realisation worthwhile (see paragraph 43.3.6) – otherwise, the property may be abandoned (see paragraph 43.3.15).


43.3.15 Abandoning the property

Where there is no prospect of the property achieving equity sufficient to make realisation worthwhile, the official receiver may cease to take any active steps in dealing with the property – effectively, ‘abandoning’ the property to the mortgagees.

Where this position is apparent prior to the process of registering his/her interest at the recorder of deeds (see paragraph 43.3.11), the official receiver may discontinue that process.  The official receiver should, though, ensure that his/her interest in noted by the mortgagees in the event of a surplus arising.


43.3.16 Disclaiming the property

The official receiver may issue a disclaimer of the property, but only if the property has some onerous obligation attached to it (such as an obligation to repair, maintain, make safe or make secure) and has no value to the estate.

See Chapter 34 for advice regarding the process of disclaiming.

Annex 1 is a document that explains the process and effect of a disclaimer and this document should, ideally, be sent to the interested parties on whom the disclaimer is served.


43.3.17 Appointing local legal representation

A outlined elsewhere in this Part it is not envisaged that the official receiver will deal with property in America without local legal representation and advice.

The official receiver’s usual solicitors in his/her locality may be able to recommend an American lawyer to take the matter forward.  If not, the following websites provide details of lawyers in America with search results able to be defined to include both geographical area and specialism:



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