Public Guide 10 – Bankruptcy petitions

Updated: October 2011

Update

This edition of the guide replaces the February 2011 edition. Section 7.1 has been updated as a result of the Land Registration (Amendment) Rules 2011, which change our definition of ‘conveyancer’ to make it consistent with the Legal Services Act 2007.

Scope of this guide

When a petition for a bankruptcy order against an individual is presented to the court, the details are entered into a number of official registers. This guide explains what official registers are involved, how the entries are made, and how the entries can be removed.

1 Introduction

This guide explains the entries that are made in official registers on or after 13 October 2003 when a petition for a bankruptcy order against an individual has been presented to the court.

Contact Land Registry for advice on any bankruptcy entries made before 13 October 2003.

It covers:

• the official registers involved

• the responsibilities of the Land Charges Department and Land Registry

• how entries come to be made in the registers

• how such entries are removed.

Public Guide 11 – Bankruptcy orders deals with cases where a bankruptcy order has subsequently been made.

2 Land Charges Department entries

When a bankruptcy petition is presented or made by the creditor to the court, the Court Service notifies the Land Charges Department and applies for the petition to be registered in the Land Charges register. The entry in the Land Charges register looks something like this:

JOHN * SMITH *

(1) P.A. (B) No.12345 DATED 1 AUG 2002

(2) (5) OXFORD COUNTY COURT

(6) BUILDER AND DECORATOR

(7) 3 ACACIA AVENUE BEDFORD

When making the entry in the register, the Land Charges Department relies on the information that the Court Service supplies, which is taken from the petition. The Land Charges Department then informs Land Registry of all new bankruptcy petitions. When it appears that the title of a sole registered owner of a registered title is affected by a bankruptcy petition, Land Registry enters a bankruptcy notice in the title register.

3 Land Registry entries

3.1 Registering bankruptcy notices

The wording of a bankruptcy notice that Land Registry makes in a title register looks like this:

“BANKRUPTCY NOTICE entered under section 86(2) of the Land Registration Act 2002 in respect of a pending action, as the title of the proprietor of the registered estate appears to be affected by a petition in bankruptcy against [name of debtor], presented in the [name] Court (Court Reference Number……) (Land Charges Reference Number PA…….).”

Land Registry will make a similar entry to this if the title of a sole owner of a registered charge or mortgage appears to be affected by a bankruptcy petition.

3.2 Confusion over names

It is inevitable that an entry will occasionally appear under a name in the register maintained by the Land Charges Department that is the same as that of a person who is not the debtor. Normally, the other details in the entry, such as the address and occupation, will make it apparent that that person is not the debtor. If the additional details are limited, however, confusion can arise.

If, when the Land Charges Department informs Land Registry of new bankruptcy petitions, there are any doubts about whether the debtor is the owner referred to in a title register, Land Registry will write to the owner before entering a bankruptcy notice. This letter will be sent to the address given in the title register. Although this address is often the same as the address of the property, this is not always the case. In addition, owners are notified when the bankruptcy notice is entered in the title register. If, despite these steps, it later transpires that the owner is not the debtor, Land Registry can cancel the entry.

4 The effect of a bankruptcy petition

When a bankruptcy petition is presented to the court, one effect it has is that subsequent disposals of certain property will generally be void if a bankruptcy order is made, unless the court consents to the disposal. This property includes any land of which the debtor is the sole beneficial owner. Anyone intending to buy such a property is unlikely to proceed if there is a petition registered in the Land Charges register or a bankruptcy notice in the title register.

5 What happens if the bankruptcy petition is withdrawn or dismissed?

The creditor may withdraw a bankruptcy petition with the consent of the court. The court may also dismiss a petition. When a bankruptcy petition is withdrawn or dismissed, the court is obliged to make an order that provides for the registration of the bankruptcy petition in the Land Charges register to be cancelled. It is up to the debtor to apply to the Land Charges Department to remove the entry, however. The court will not make the application. A debtor who is the sole owner of registered land or who has a charge (mortgage) over registered land will need to apply to Land Registry for removal of the bankruptcy notice.

6 How do I apply to the Land Charges Department for a bankruptcy entry to be removed?

To remove a bankruptcy entry from the register, you need to use Land Charges form K11 and pay the appropriate fee for each bankruptcy entry you want to have removed.

You can contact the Land Charges Department (use the address in section 9.2 Addresses) to check the current fee required.

The K11 application must be accompanied by a copy of a court order that expressly provides for the cancellation (or 'vacation') of the bankruptcy entry in the Land Charges register under the reference number specified in the bankruptcy notice. After the Land Charges Department has dealt with the application to remove the entry – usually on the same day as the application is received – they will inform you that the entry has been removed.

7 How do I apply to Land Registry for a bankruptcy notice to be removed?

7.1 Court order

You must apply using form AP1 and include with it a copy of the court order under which the petition has been dismissed or withdrawn, that should also expressly authorise the cancellation of the entry in the Land Charges register under the reference number specified in the bankruptcy notice. The application should be sent to Land Registry's Bankruptcy Unit (use the address in section 9.2 Addresses). No fee will be charged.

Please note that any court order you send to us must be an original document, an official copy, or a copy certified as being a true copy by a conveyancer. ‘Conveyancer’ in this context means a person authorised by law to provide conveyancing services referred to in the Legal Services Act 2007, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities, and includes solicitors and licensed conveyancers.

7.2 Where the owner is not the debtor

If you, as owner of the land, are not the debtor, you can apply to Land Registry for removal of the bankruptcy notice on that basis. The requirements are the same as in section 7.1 Court order, except that a court order is not required. In place of the order, you must send a signed statement to the effect that you are not the debtor named in the bankruptcy proceedings referred to in the title register. If the registrar is satisfied that this is the case, the bankruptcy notice will be cancelled. Please note that in some cases, particularly where the entry was made some years ago, you may be required to provide a statutory declaration or statement of truth instead of a signed statement.

8 Some unfamiliar terms explained

Bankruptcy notice – the entry made in the title register in respect of a bankruptcy petition.

Creditor – the person who presented the bankruptcy petition.

Debtor – the person against whom the petition was made.

Estate – a person’s interest in land, which may be freehold or leasehold.

Land Charges register – the registers kept by the Land Charges Department, including the ‘register of pending actions’.

Title register – the individual register held for each separate estate registered by Land Registry.

9 General information

9.1 Forms

Section 10 – Appendix A and section 11 – Appendix B include links to forms K11 and AP1 on our website that you can use to apply to the Land Charges Department and to Land Registry. Alternatively, you can download them free of charge from the Land Registry website, or obtain them from any law stationer.

9.2 Addresses

The Land Charges Department is at:

Seaton Court
2 William Prance Road
Plymouth
PL6 5WS
Telephone: 0300 006 6666

Land Registry Bankruptcy Unit is at:

Land Registry Plymouth Office
Seaton Court
2 William Prance Road
Plymouth
PL6 5WS
Telephone: 0800 0685 038

10 Appendix A – Completed example of form K11

11 Appendix B – Blank example of form K11

Form K11 (PDF)

12 Appendix C – Blank example of form AP1

Form AP1 (PDF)

Remember

• Use form K11 when applying to the Land Charges Department.

• Use form AP1 when applying to Land Registry.

• Have you enclosed the correct Land Charges fee?

• Have you signed form K11 or form AP1?

• Do you need to enclose a court order? If so, ensure it is an original, or an official copy or a copy certified a true copy by a solicitor, licensed conveyancer, fellow of the Institute of Legal Executives, barrister, notary public or registered European lawyer (a European lawyer who is registered with the Law Society).

• Have you enclosed a signed statement, statement of truth or statutory declaration?

Please note that Land Registry may be unable to process applications that are incomplete or defective.