Owed money from a bankrupt or a company in liquidation
Who deals with bankruptcy and company liquidation claims?
The early stages of a bankruptcy or compulsory liquidation are usually handled by an official receiver (OR). If there are significant assets, an insolvency practitioner (IP) may be appointed as trustee/liquidator in place of the OR.
ORs are civil servants at The Insolvency Service and officers of the court they are attached to. The Insolvency Service is responsible for dealing with financial failure and misconduct through the OR. As well as administering cases, ORs have a duty to investigate the affairs of individuals in bankruptcy and companies in compulsory liquidation.
ORs report evidence of illegal activity to whichever prosecuting agency deals with that type of offence.
IPs are licensed insolvency specialists who work in the private sector - usually as accountants or solicitors. By law, they must be authorised to act as IPs. They handle all other insolvency procedures except fast-track voluntary arrangements and debt relief orders. You can find out more about these procedures in our guides on Fast Track Voluntary Arrangements and insolvency options for individuals: Debt Relief Orders.
Both the OR and IPs are legally required to report unfit conduct to the Investigations and Enforcement Services of The Insolvency Service. They will then decide whether or not to begin court proceedings to disqualify the director or extend the restrictions on a bankrupt.
The trustee in bankruptcy is the OR/IP who takes control of the assets. The trustee's main duties are to sell these assets and share out the money among the creditors.
The liquidator is the OR/IP appointed to administer the liquidation of a company or partnership.
Trustee or liquidator payment
Payment - known as remuneration - for an OR acting as trustee/liquidator is specified under insolvency law.
An IP's remuneration as trustee/liquidator is fixed by the creditors'/liquidation committee. If there is no committee, it may be fixed at a meeting of creditors. See the page in this guide on creditors' meetings and creditors'/liquidation committees.
The remuneration can be fixed as a percentage of the value of the assets realised - sold - and distributed, or on a time basis. If creditors don't agree a remuneration, the IP gets the same amount that would have been paid to an OR - unless the IP applies to court and arranges a higher amount.
As a creditor, if you think an IP's remuneration is too high, you may be able to apply to court for it to be reviewed. In order to do so, you would need the support of enough unsecured creditors - ie those without security against non-payment of debt - to account for at least 25 per cent of the total debt value.
Subjects covered in this guide
Insolvency Service Enquiry Line
0845 602 9848