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Appointment of a trustee in bankruptcy


From the commencement of bankruptcy the Official Receiver acts as receiver and manager of the bankrupt’s property.  However, where there are assets of any value or a detailed investigation appears necessary, a trustee in bankruptcy will normally be appointed.

Appointment of trustee in bankruptcy

A trustee in bankruptcy, who must be a licensed insolvency practitioner, can be appointed in one of the following ways:

  • By a meeting of the bankrupt’s creditors. The Official Receiver must decide within 12 weeks of the bankruptcy order whether to summon a meeting of creditors. Notice of not less than 14 days must be given to every creditor known to the Official Receiver and the court must be notified. If the Official Receiver decides against calling a meeting, creditors holding not less than 25% of the debts by value can require him or her to do so, subject to paying a deposit to cover the cost of the meeting. Once convened, the meeting can appoint a trustee, a creditors committee and settle the basis of the trustee’s remuneration.
  • By the Secretary of State. This may occur where there is a creditor holding the vast majority of the debt and wants a particular insolvency practitioner to take the appointment or where the Official Receiver considers that it would be preferable not to hold a meeting (with a view to avoiding cost and delay) but to appoint an insolvency practitioner from the ‘rota’.
  • By the court. This may occur where bankruptcy arises following the failure of an Individual Voluntary Arrangement and the supervisor of the IVA is appointed trustee or where the court appoints the insolvency practitioner who has reported to the court in connection with a debtor’s petition.

Sometimes joint trustees are appointed to share the responsibilities of the office.

Trustee’s duties and responsibilities

 The trustee has a number of legal duties:

  • Duty to advertise appointment. As soon as appointed the trustee must give public notice of this in the London Gazette and in such other manner as the trustee thinks fit.
  • Duty to assist the Official Receiver. The trustee is under a duty to provide the Official Receiver which such information as may reasonably be required from time to time.
  • Duty to report to the FCA. Where the bankrupt was regulated by the Financial Conduct Authority there is a duty on the trustee to report on any misconduct on the part of the bankrupt.
  • Duty to use the Insolvency Service Account. The trustee is required to pay all sums received over £5,000 into the government’s account. An ‘ad valorem duty’ is deducted from monies paid into this account, which reduces the amount available to creditors.
  • Duty to keep records. A trustee is required to keep separate accounts for each bankrupt.
  • Duty to investigate. Although unlike the Official Receiver, there is no specific legal duty on the trustee to investigate the affairs of the bankrupt, the requirement to get in the assets for the benefit of the creditors normally leads to an investigation of one kind or another – role and powers of the trustee in bankruptcy.

There are various continuing reporting requirements and the trustee will carry out his or her duties subject to the supervision of the creditor’s committee, or if there is no committee, subject to the supervision of the Secretary of State. If the bankrupt or the creditors are dissatisfied with any aspect of the trustee’s conduct of the bankruptcy, an application can be made to the court. However, the court will not intervene as a matter of course and there would need to evidence that the trustee was acting unreasonably before the court would interfere with the trustee’s discretion. The trustee can ask the court for guidance in any situation where he or she is unsure as to the best course to take.

Taking legal advice

The appointment of a trustee in bankruptcy and the performance of this role may have a significant bearing on the outcome of the bankruptcy.  Our solicitors are able to provide advice on the many issues that can arise in this area.

For more information proceed to role and powers of the trustee in bankruptcy

For more information, please contact our team of experts by emailing insolvency@bankruptcy-solicitors.com or call 020 8308 3610 today. 

Meet the Appointment of a trustee in bankruptcy team