Commentary on Sections Individuals Section 261: Bankrupt's Home
761.Section 261 makes provision in relation to the sole or principal residence of the bankrupt, the bankrupt’s spouse or the former spouse of a bankrupt, and where the bankrupt has an interest that is comprised in the bankrupt’s estate. The section (subsection (1)) inserts section 283A into the Insolvency Act 1986. This new section provides that where a bankrupt’s estate comprises an interest in such a residence, that interest reverts back to the bankrupt unless within the three year period following the date of the bankruptcy the trustee:
762.The section (subsection (3)) also inserts a new section 313A into the Insolvency Act 1986 which provides for the dismissal of applications for orders for sale, possession or a charging order in respect of the bankrupt’s residence where the value of the bankrupt’s interest is below a level prescribed in secondary legislation.