Bankruptcy and Bailiffs

Upon the declaration of bankruptcy for an individual or company, most non-essential assets of the bankrupt exceeding (usually) £1000 are used for creditor payment. Assets like jewellery, art, and family heirlooms are generally exempt from this process unless exceptionally valuable or rare. Bailiffs who have taken goods must relinquish them to the Official Receiver. Any outstanding debts subject to enforcement are now managed by the Receiver and can no longer be pursued through bailiffs.

The legal framework aims to prevent creditors from pursuing debt collection efforts before the debtor undergoes bankruptcy proceedings. All creditors are required to queue up for payment in a specific order of priority based on their status.

Depending on the value of the bankrupt individual's or company's assets, creditors may not receive any repayment at all.

In cases where bailiffs persist in harassing or bothering you post-bankruptcy, it is imperative to provide their details to the official receiver, who will handle communication with them.

Ensure to list all debts owed on the PIQB Form, a Preliminary Information Questionnaire for Bankruptcy, so they can be included in your estate, relieving you of liability after approximately one year in most cases.

The interplay between bailiff enforcement and bankruptcy is delineated in the Insolvency Act 1986.

Assets held in trust for a minimum of three years before the petition date are excluded from bankruptcy proceedings and cannot be used for debt settlement. Refer to the establishment of a Creating a Family Protection Trust for further details.

If you anticipate inheriting assets while undergoing bankruptcy, it is advisable to request the testator to modify their will to place your inheritance in a trust. Should the testator survive, the amendment can be revoked subsequent to your discharge from bankruptcy.

In instances where bailiffs have taken your possessions (or money) or clamped your vehicle, it is essential to inform the Official Receiver, who will instruct the bailiff to release the vehicle.


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Certain debts subject to bailiff enforcement cannot be discharged through bankruptcy.

These include outstanding child support payments, student loans, and fines issued by magistrate's courts. The Official Receiver is obligated to allocate adequate income to cover these obligations.



The Law:

Section 184 of the Insolvency Act 1986 states:

Duties of officers charged with execution of writs and other processes

(1)The following applies where a company’s goods are taken in execution and, before their sale or the completion of the execution (by the receipt or recovery of the full amount of the levy), notice is served on the enforcement officer, or other officer, charged with execution of the writ or other process, that a provisional liquidator has been appointed or that a winding-up order has been made, or that a resolution for voluntary winding up has been passed.

(2)The enforcement officer or other officer shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator; but the costs of execution are a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part of them for the purpose of satisfying the charge.

(3)If under an execution in respect of a judgement for a sum exceeding £500 a company’s goods are sold or money is paid in order to avoid sale, the enforcement officer or other officer shall deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 14 days.

(4)If within that time notice is served on the enforcement officer or other officer of a petition for the winding up of the company having been presented, or of a meeting having been called at which there is to be proposed a resolution for voluntary winding up, and an order is made or a resolution passed (as the case may be), the enforcement officer or other officer shall pay the balance to the liquidator, who is entitled to retain it as against the execution creditor.

(5)The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

(6)In this section, "goods" includes all chattels personal; and "enforcement officer" means an individual who is authorised to act as an enforcement officer under the Courts Act 2003.

(7)The money sum for the time being specified in subsection (3) is subject to increase or Reduction by order under section 416 in Part XV. (8)This section does not apply in the case of a winding up in Scotland.


Section 346 of the Insolvency Act 1986 states:

Enforcement procedures.

(1)Subject to section 285 in Chapter II (restriction on proceedings and remedies) and to the following provisions of this section, where the creditor of any person who is adjudged bankrupt has, before the commencement of the bankruptcy—

(a)issued execution against the goods or land of that person, or

(b)attached a debt due to that person from another person, that creditor is not entitled, as against the official Receiver or trustee of the bankrupt’s estate, to retain the benefit of the execution or attachment, or any sums paid to avoid it, unless the execution or attachment was completed, or the sums were paid, before the commencement of the bankruptcy.

(2)Subject as follows, where any goods of a person have been taken in execution, then, if before the completion of the execution notice is given to the enforcement officer or other officer charged with the execution that that person has been adjudged bankrupt—

(a)the enforcement officer or other officer shall on request deliver to the official receiver or trustee of the bankrupt’s estate the goods and any money seized or recovered in part satisfaction of the execution, but

(b)the costs of the execution are a first charge on the goods or money so delivered and the official receiver or trustee may sell the goods or a sufficient part of them for the purpose of satisfying the charge.

(3)Subject to subsection (6) below, where—

(a)under an execution in respect of a judgment for a sum exceeding such sum as may be prescribed for the purposes of this subsection, the goods of any person are sold or money is paid in order to avoid a sale, and

(b)before the end of the period of 14 days beginning with the day of the sale or payment the enforcement officer or other officer charged with the execution is given notice that a bankruptcy petition has been presented in relation to that person, and

(c)a bankruptcy order is or has been made on that petition, the balance of the proceeds of sale or money paid, after deducting the costs of execution, shall (in priority to the claim of the execution creditor) be comprised in the bankrupt’s estate.

(4)Accordingly, in the case of an execution in respect of a judgment for a sum exceeding the sum prescribed for the purposes of subsection (3), the enforcement officer or other officer charged with the execution—

(a)shall not dispose of the balance mentioned in subsection (3) at any time within the period of 14 days so mentioned or while there is pending a bankruptcy petition of which he has been given notice under that subsection, and

(b)shall pay that balance, where by virtue of that subsection it is comprised, in the bankrupt’s estate, to the official receiver or (if there is one) to the trustee or that estate.

(5)For the purposes of this section—

(a)an execution against goods is completed by seizure and sale or by the making of a charging order under section 1 of the Charging Orders Act 1979;

(b)an execution against land is completed by seizure, by the appointment of a receiver or by the making of a charging order under that section;

(c)an attachment of a debt is completed by the receipt of the debt.

(6)The rights conferred by subsections (1) to (3) on the official receiver or the trustee may, to such extent and on such terms as it thinks fit, be set aside by the court in favour of the creditor who has issued the execution or attached the debt.

(7)Nothing in this section entitles the trustee of a bankrupt’s estate to claim goods from a person who has acquired them in good faith under a sale by an enforcement officer or other officer charged with an execution.

(8)Neither subsection (2) nor subsection (3) applies in relation to any execution against property which has been acquired by or has devolved upon the bankrupt since the commencement of the bankruptcy, unless, at the time the execution is issued or before it is completed—

(a)the property has been or is claimed for the bankrupt’s estate under section 307 (after-acquired property), and

(b)a copy of the notice given under that section has been or is served on the enforcement officer or other officer charged with the execution.

(9)In this section "enforcement officer" means an individual who is authorised to act as an enforcement officer under the Courts Act 2003.