Insolvency Act 1986

347 Distress, etc. E+W

(1) The right of any landlord or other person to whom rent is payable to distrain upon the goods and effects of an undischarged bankrupt for rent due to him from the bankrupt is available (subject to [F1 sections 252(2)(b) and 254(1) above and] subsection (5) below) against goods and effects comprised in the bankrupt’s estate, but only for 6 months’ rent accrued due before the commencement of the bankruptcy.

(2) Where a landlord or other person to whom rent is payable has distrained for rent upon the goods and effects of an individual to whom a bankruptcy petition relates and a bankruptcy order is subsequently made on that petition, any amount recovered by way of that distress which—

(a) is in excess of the amount which by virtue of subsection (1) would have been recoverable after the commencement of the bankruptcy, or

(b) is in respect of rent for a period or part of a period after the distress was levied,

shall be held for the bankrupt as apart of his estate.

(3) Where any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of an individual who is adjudged bankrupt before the end of the period of 3 months beginning with the distraint, so much of those goods or effects, or of the proceeds of their sale, as is not held for the bankrupt under subsection (2) shall be charged for the benefit of the bankrupt’s estate with the preferential debts of the bankrupt to the extent that the bankrupt’s estate is for the time being insufficient for meeting those debts.

(4) Where by virtue of any charge under subsection (3) any person surrenders any goods or effects to the trustee of a bankrupt’s estate or makes a payment to such a trustee, that person ranks, in respect of the amount of the proceeds of the sale of those goods or effects by the trustee or, as the case may be, the amount of the payment, as a preferential creditor of the bankrupt, except as against so much of the bankrupt’s estate as is available for the payment of preferential creditors by virtue of the surrender or payment.

(5) A landlord or other person to whom rent is payable is not at any time after the discharge of a bankrupt entitled to distrain upon any goods or effects comprised in the bankrupt’s estate.

(6) Where in the case of any execution—

(a) a landlord is (apart from this section) entitled under section 1 of the M1 Landlord and Tenant Act 1709 or section 102 of the M2 County Courts Act 1984 (claims for rent where goods seized in execution) to claim for an amount not exceeding one year’s rent, and

(b) the person against whom the execution is levied is adjudged bankrupt before the notice of claim is served on the sheriff or other officer charged with the execution,

the right of the landlord to claim under that section is restricted to a right to claim for an amount not exceeding 6 months’ rent and does not extend to any rent payable in respect of a period after the notice of claim is so served.

(7) Nothing in subsection (6) imposes any liability on a sheriff or other officer charged with an execution to account to the official receiver or the trustee of a bankrupt’s estate for any sums paid by him to a landlord at any time before the sheriff or other officer was served with notice of the banktuptcy order in question.

But this subsection is without prejudice to the liability of the landlord.

(8) [F2 Subject to sections 252(2)(b) and 254(1) above] nothing in this Group of Parts affects any right to distrain otherwise than for rent; and any such right is at any time exerciseable without restriction against property comprised in a bankrupt’s estate, even if that right is expressed by any enactment to be exerciseable in like manner as a right to distrain for rent.

(9) Any right to distrain against property comprised in a bankrupt’s estate is exerciseable notwithstanding that the propety has vested in the trustee.

(10) The provisions of this section are without prejudice to a landlord’s right in a bankruptcy to prove for any bankruptcy debt in respect of rent.

Textual Amendments

F1 Words in s. 347(1) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 14(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F2 Words in s. 347(8) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 14(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Marginal Citations

M1 1709 c. 18.

M2 1984 c. 28.