What is Bankruptcy?
Bankruptcy is a process where, for a person who is wholly or partially unable to repay their debts (both secured and unsecured), a compromise with creditors is agreed and approved, and entered into with the court’s oversight.
The intention of the bankruptcy process is to equitably allocate your assets among your creditors and in turn provide safeguards for bankruptees from these same creditors. This reallocation process is conducted through a court official (the Official Assignee in Bankruptcy), who administers the Bankruptcy Division of the Insolvency Service of Ireland (ISI).
Why should the purchasing solicitor/ conveyancer search for bankruptcies
when investigating title in a property/ right/ interest purchase?
For persons that have been adjudicated as Bankrupt, they can no longer control (or deal in a sale, mortgage etc of) their real property assets for sale purposes, as their interest in the property would now be vested in the Official Assignee of the Bankruptcy Office in the High Court.
For those reasons, solicitors or conveyancers acting on behalf of the purchasers need to be certain that the property sellers are not bankrupt and still retains the authority and control over the property for sale.
Additionally, when there is an undertaking by the solicitor or conveyancer to protect the interests of a lender/ lending institute where there is a mortgage to be issued; searches are generally also conducted against the names of those persons or entities purchasing the property/ right/ interest.
The purpose for Bankruptcy searches against the borrower(s) is that, as part of a lender’s Review of Security, the lending body needs to be informed of any material information that could impact on their willingness to provide a mortgage, etc.
What Registers are searched against in an Ellis & Ellis Bankruptcy Search?
When Ellis &Ellis conduct bankruptcy searches, we carry out checks on the records of the Office of the Examiner of the High Court, and the Bankruptcy Division of the Insolvency Service of Ireland.
Primarily this is done to determine whether there are any Petitions in the Bankruptcy Register for the last year only*, the Deeds of Arrangements Register ‡ from 14th day of April 1922 to date, and the Register of EU Personal Insolvencies† from the 14th of April 2004 to date.
* This Bankruptcy report also includes searches for any bankrupts that have had their bankruptcies ‘extended’ or ‘interim extended’.
† The EU Personal Insolvency Register records persons who have been made bankrupt in an EU country, and whose details have subsequently been added to the EU Personal Insolvency register for Ireland only. This registration process does not happen as a matter of course. A creditor (usually) would have to go to the trouble of actively lodging same. If the creditor wanted to register an act in all EU countries, then it would have to register same in each individual EU register held by each individual EU member country).
‡ The requirement to maintain a Deeds of Arrangements Register was enacted under The Deeds of Arrangement Act 1887 On 16th September 1887. The Deed of Arrangement legislation set out the instruments ‘…made by, for, or in respect of the affairs of a debtor for the benefit of his creditors to include:
(a) An assignment of property
(b) A deed of or agreement for a composition […an agreement among the creditors of an insolvent debtor to
accept an amount less than they are owed, in order to receive immediate payment]
And in cases where creditors obtain control over a debtor’s property or business: —
(c) A deed of inspectorship entered into for the purpose of carrying on or winding up a business;
(d) A letter of licence authorising the debtor or any other person to manage, carry on, realise, or dispose of a business, with a view to the payment of debts; and
(e) Any agreement or instrument entered into for the purpose of carrying on or winding up the debtor’s business or authorising the debtor or any other person to manage, carry on, realise, or dispose of the debtor’s business, with a view to the payment of his debts.
The type of information that can be recorded on the Deed of Arrangement register are as follows: –
(a) The date of the deed:
(b) The name, address, and description of the debtor, and the place or places where his business is carried on,
and the title of the firm or firms under which the debtor carries on business, and the name and address of the trustee (if any) under the deed:
(c) A short statement of the nature and effect of the deed, and of the composition in the pound payable thereunder:
(d) The date of registration:
(e) The amount of property and liabilities included under the deed, as estimated by the debtor.
How and what to search for on the Bankruptcy Register?
Searches are usually conducted against the following: –
Seller Names: In practical terms, a bankruptcy register search is typically conducted against the names of the individuals (and/ or entities) selling the property (or an interest or a right).
Purchasers Names: Additionally, when there is an undertaking by the solicitor/ conveyancer to protect the interests of a lender/ lending institute where there is a mortgage to be issued; searches are generally also conducted against the names of those persons or entities purchasing the property/ right/ interest. The purpose for this is that it part of a lender’s ‘Review of Security’ and could impact on the lenders’ willingness to provide a mortgage, etc.
Are addresses required to be provided as part of the searching instruction?
The short answer is that addresses are not required.
Ultimately, bankruptcy searches are conducted against the bearers of a name against whom a bankruptcy has been recorded. As such any searches are strictly confined to the names (irrespective of address) provided in the searching instruction.
What will the Ellis & Ellis certified Bankruptcy result show me?
As mentioned above, if the search finds any matching name entries in the Bankruptcy Register for the last year only*, the Deeds of Arrangements Register ‡ from 14th day of April 1922 to date, and the Register of EU Personal Insolvencies† it will display same in the result.
For matching ‘hits’ for a name, the results will say which of the three registers the name appears on. It will show the first name, surname, and address details of the returned; along with a record number, registration date and status field.
Occasionally, the status field will appear blank or without a comment. However, sometimes the field may indicate if the person’s bankruptcy has been interim extended, extended; or merely provides a date of adjudication in the case of E.U. Personal insolvencies.
Naturally, if there are no matches, that too will be clearly stated in our result.
So how will I know if a ‘hit’ on the bankruptcy register is the seller or my client?
It may not be clear if a person that has been recorded as bankrupt is your person of interest or not. This is particularly true if the address does not match any of the addresses on title. The explanation being that the person might have been recorded at the time of bankruptcy at a different address to the current property being conveyed.
As such, if any such ‘hits’ are identified, as the purchasing solicitor/ conveyancer the matter can be raised with the selling solicitor/ conveyancer to show or provide acceptable declarations that this is not their client who bears a similar name, albeit at a different current address.
So how long does a Bankruptcy last?
Bankruptcies are usually ‘discharged by law’ after 12 months.
However, under section 85A of the Bankruptcy Act 1988 (the Act), if the bankrupt has been deemed ‘…not fully cooperative…’ or deemed to having ‘…hidden or failed to disclose assets which could be realised for the benefit of creditors…’ then the Official Assignee may ‘extend’ or ‘interim extend’ the bankruptcy period beyond the natural 12 month bankruptcy period.
The Court has the authority to extend the term of bankruptcy for up to eight years or fifteen years if it views ‘…the actions of the bankrupt as particularly serious….’.
While Ellis & Ellis’ standard bankruptcy search reports on current, interim extended, or extended entries; any entry for a bankrupt’s name will remain on the official registers in perpetuity unless annulled, discharged, discharged by law, or dismissed.
Use a trusted Law Search provider
Given the serious ramifications set out above of either not conducting a search at all, or worse, conducting an inadequate or erroneous Bankruptcy search; it is imperative that purchasing solicitors/ conveyancers use a trusted law search provider such as Ellis & Ellis.
With our blend of a quick and easy-to-use ordering platform at www.ellis.ie , over 130 years of professional know-how, and a quality after-sales experience, we provide clients with a superior searching service.
For added peace of mind Ellis & Ellis provide Professional Indemnity Cover in excess of €10 million.
Why not join the 1000’s of users who trust Ellis & Ellis to deliver them a competitive edge?