Furniture and bankruptcy - Case Study Number 2
The law regarding furniture within a bankruptcy is set out in section 283 of the Insolvency Act.
If you have not already read this section and wish to do so please click here.
Within this illustration we examine the interpretation of the word "reasonable" as far as section 283 is concerned.
You can keep furniture you "reasonably" need - but what is "reasonable"?
Ben is a bachelor. He owns his own home which is a two bedroom flat with a kitchen, dining room and lounge. The flat is full of furniture of a normal everyday nature. Several years age Ben inherited a picture by Picasso from his uncle. Ben, for reasons not addressed here is made bankrupt.
Can Ben keep his "everyday furniture"?
Can Ben keep the "Picasso" picture?
Ben can retain his "everyday furniture" as it is needed by him for his "reasonable" use.
Ben has to hand over the Picasso to the Official Receiver as he does not "reasonably" need that picture for his everyday needs.
In the experience of Purnells over the years since the 1986 Insolvency Act was made law, only one client has had some furniture retained by the Official Receiver.
If you click on the third case study on "furniture" you will see what happened in that particular matter.