Rule 6.237D Charging OrderF1

(1)

This Rule applies where the trustee applies to the court under section 313 for an order imposing a charge on property consisting of an interest in a dwelling-house.

(2)

The respondents to the application shall be—

(a)

any spouse or former spouse F2or civil partner or former civil partner of the bankrupt having or claiming to have an interest in the [FORM 4.21]property;

(b)

any other person appearing to have an interest in the property; and

(c)

such other persons as the court may direct.

(3)

The trustee shall make a report to the court, containing the following particulars—

(a)

the extent of the bankrupt’s interest in the property which is the subject of the application;

(b)

the amount which, at the date of the application, remains owing to unsecured creditors of the bankrupt; and

(c)

an estimate of the cost of realising the interest.

(4)

The terms of the charge to be imposed shall be agreed between the trustee and the bankrupt or, failing agreement, shall be settled by the court.

(5)

The rate of interest applicable under section 313(2) is the rate specified in section 17 of the Judgments Act 1838 on the day on which the charge is imposed, and the rate so applicable shall be stated in the court’s order imposing the charge.

(6)

The court’s order shall also—

(a)

describe the property to be charged;

(b)

state whether the title to the property is registered and, if it is, specify the title number;

(c)

set out the extent of the bankrupt’s interest in the property which has vested in the trustee;

(d)

indicate, by reference to any, or the total, amount which is payable otherwise than to the bankrupt out of the estate and of interest on that amount, how the amount of the charge to be imposed is to be ascertained;

(e)

set out the conditions (if any) imposed by the court under section 3(1) of the Charging Orders Act 1979; and

(f)

identify the date any property charged under section 313 shall cease to be comprised in the bankrupt’s estate and shall, subject to the charge (and any prior charge), vest in the bankrupt.

(7)

Unless the court is of the opinion that a different date is appropriate, the date referred to in paragraph (6)(f) shall be that of the registration of the charge in accordance with section 3(2) of the Charging Orders Act 1979.

(8)

Where the court order is capable of giving rise to an application or applications under the Land Charges Act 1972 or the Land Registration Act 2002, the trustee shall, as soon as reasonably practicable after the making of the court order or at the appropriate time, make the appropriate application or applications to the Chief Land Registrar.

(9)

In paragraph (8) an “appropriate application” is—

(a)

an application under section 6(1)(a) of the Land Charges Act 1972 (application for registration in the register of writs and orders affecting land); or

(b)

an application under the Land Registration Act 2002 for an entry in the register in respect of the charge imposed by the order; and such application under that Act as shall be necessary to show in the individual register or registers of the dwelling-house that the interest has vested in the bankrupt.

(F310)

In determining the value of the bankrupt’s interest for the purposes of paragraph (6)(c), the court shall disregard that part of the value of the property in which the bankrupt’s interest subsists which is equal to the value of—

(a)

any loans secured by mortgage or other charge against the property;

(b)

any other third party interest; and

(c)

the reasonable costs of sale.

Annotations

Textual amendments

F1: Rules 6.237-6.237E substituted for rule 6.327 (1.4.2004) by The Insolvency (Amendment) Rules 2003 (S.I. 2003/1730), rule 1(3), Sch. 1 para. 51
F2: Words in rule 6.237D(2)(a) inserted (5.12.2005) by The Civil Partnership Act 2004 (Amendments to Subordinate Legislation) Order 2005 (S.I. 2005/2114), art. 1, Sch. 18 para. 1(5)
F3: Rule 6.237D(10) inserted (1.4.2004) by The Insolvency (Amendment) Rules 2004 (S.I. 2004/584), rules 1(2), 43