The answer is that s14 directs the court to take into account the factors in s335A(2) IA 1986. What the court cannot do is take into account factors referred to in the 1996 Act when an order for sale is sought by a secured creditor (as opposed to a trustee in bankruptcy). Thus, if a trustee in bankruptcy is involved, you look at IA 1986, rather than TLATA 1996.

Under IA 1986, the court has to balance the competing interests. On the one hand, there will be the interests of the creditors. On the other hand, the court will typically look at the conduct of the bankrupt’s spouse/partner (in terms of contributing to the bankruptcy, as well as the needs and financial circumstances of the spouse/partner and any children). No guidance is given in IA 1986 as to the relative weight of these competing factors. But, the real bite is in s335A(3) which says that if the application for sale is made more than one year after the vesting of the bankrupt’s estate in the trustee in bankruptcy, then an order will be made unless there are ‘exceptional circumstances’. The rationale behind this seems to be that a year is normally a sufficient period of time for the bankrupt and his family to adjust to their new, reduced, circumstances.

What will amount to ‘exceptional circumstances’ preventing a sale? The answer is: very little. The courts have made it clear that ‘exceptional’ means just that; the ‘usual’ consequences of bankruptcy (eg the need to move home or school) are not sufficient to override the interests of the creditors (and are ‘the melancholy consequences of debt and improvidence with which every civilised society has been familiar’). On the relatively few occasions where exceptional circumstances have been found, and the sale postponed, the situation can genuinely have been described as extreme, and most involve the ‘personal circumstances of one of the joint owners, such as a medical or mental condition’ (Dean [2005]).

It has been suggested in one case that human rights arguments might require the courts to be less rigid in their interpretation of ‘exceptional circumstances’ (eg if the rights of young children are being infringed). For the time being, however, that remains speculation and the courts seem content to adhere to the traditional, strict, approach. For a review of the authorities see useful article in [2007] NLJ 1374. © Practical Lawyer