Prior to the 4 April 2012, it was thought that a trustee in bankruptcy would not be able to claim a bankrupt’s pension pot for the benefit of the bankrupt’s creditors if the bankrupt had not exercised his right to call for payment.
Tactically it was possible for the bankrupt to avoid his pension pot being available to creditors by simply biding his time and counting down the days.
In Raithatha v Williamson [2012] EWHC 909 Ch, the Judge asked himself whether it was intended that there should be different treatment in law between those who had called down their pension pots and those that had not but were entitled to do so.
The Judge decided that the difference in law was illogical. The Judge commented:
An anomaly which is difficult to justify…the creation of which is to discriminate
Unfortunately for Mr Williamson, his pension fund in the region of £ 1 million would now be available for his creditors following the ruling.
An early Easter egg for Mr Williamson’s creditors and creditors generally.
Leanne Schneider-Rose a Partner in the Dispute Resolution Department comments:
Insolvency Practitioners need to review any cases where the bankrupt has a pension pot to ensure that the bankrupt has not been biding his time because action must generally be taken within one year. Act now before it is too late”.
For further information on this article please contact Leanne Schneider-Rose on 0121 746 3300, email l.schneider-rose@sydneymitchell.co.uk or fill in our online enquiry form.
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