Re A Debtor

Bankruptcy

Sarah Clarke acted for an applicant seeking annulment of a bankruptcy order in the High Court on grounds of payment in full. The annulment was to be funded by the bankrupt's wife remortgaging a jointly owned property. The bankruptcy debts had not been paid in full but the solicitors dealing with the remortgage held bankers drafts for sums which would cover all the bankruptcy debts and expenses and undertook to pay these sums upon an annulment order being granted.

Held: Deputy Registrar Cheryl Jones made the annulment order on terms that the order was not to be drawn up until the Official Receiver confirmed all debts and costs had been paid. The Deputy Registrar distinguished the situation where the solicitor held bankers drafts in the names of the creditors from a situation where monies where held in a solicitor's client account and were at risk if the solicitors practice was intervened before the undertaking was fulfilled. Halabi v London Borough of Camden and Another [2008] ALL ER (D) 213 (Feb) applied.