Charging orders and bankruptcy

Tagore Investments SA v Official Receiver [2009] All ER (D) 63 (Jan)

A ploy sometimes adopted by debtors against whom an interim charging order has been made is to be made bankrupt on their own petition before a final charging order has been made. In this way, the debtor can frustrate the creditor and benefit his own and his family’s interest. However, the Insolvency Act 1986 s346(6) gives the court a discretion to make the charging order final in these circumstances. It is a discretion to be exercised with great caution and only in an exceptional case. The court did exercise its discretion to make a final charging order in this case.