Will Katie (Pay The) Price….?

Former model and media personality, Katie Price, was made bankrupt for a second time earlier this year and has gotten herself into more hot water by failing to attend an examination hearing on 30 July 2024.

As a result of her failing to attend the hearing, which was for her to answer questions in relation to her finances, a warrant for her arrest was issued by the Court. ICC Judge Catherine Burton when issuing the warrant commented that Ms Price had “no real excuse in failing to attend the hearing”.

Second bankruptcy order and arrest warrant

On 18 March 2024, Ms. Price was declared bankrupt for the second time in five years in relation to an unpaid tax bill due to HM Revenue & Customs totalling of £761,994.05.

After the bankruptcy order was made in March, Ms Price was ordered to attend Court for examination into her finances and asset position. A hearing for this examination was set for 30 July 2024, which Ms Price failed to attend.

As a result of this failure, ICC Judge Burton issued a warrant for her arrest so that she could be brought before the Court and compelled to give an account of her finances. ICC Judge Burton explained that whilst the arrest warrant was not issued “lightly” Ms Price had only offered “piece-meal co-operation” and failed to provide the “most basic information”. In relation to her bankruptcy.

Additionally, ICC Judge Burton made clear that Ms Price had received “very clear warnings” that she must attend the hearing on 30 July 2024 but had failed to adhere to them.

Ms Price’s asset position

Ms. Price had reportedly suggested to the Official Receiver, that she would deliver some of her personal vehicles to the Trustee in Bankruptcy offset her part of her bankruptcy debt, one such vehicle was her iconic pink Range Rover with her personalised registration plate.

What happens when you are declared bankrupt?

When declared bankrupt, individuals are legally required under the provisions of the Insolvency Act 1986 to co-operate with the Official Receiver or Trustee in Bankruptcy, in relation to their investigations into their bankruptcy estate.

The function of the Official Receiver/Trustee in Bankruptcy is to “get in, realise and distribute the bankrupt’s estate”. To assist with these investigations the Bankrupt is obliged to provide (amongst other things) the following:

As Ms Price has found out to her detriment, if the Bankrupt fails in their duties the Official Receiver/Trustee in Bankruptcy has wide-ranging powers available to the officeholder to seek disclosure of such information, and if necessary, ask the Court to issue a warrant for their arrest to force the Bankrupt to compel with their obligations under the Insolvency Act 1986.

That said, and as alluded to by ICC Judge Burton, arrest warrants are not issued lightly and usually will only be considered if the Official Receiver/Trustee in Bankruptcy has exhausted all other avenues to engage with the Bankrupt.

Whether or not the issuing a warrant for her arrest will make Ms Price engage with the bankruptcy process remains to be seen, however it ought to be a useful reminder to all that being made bankrupt is not a “get out of jail free” card in relation to debt.

Being made bankrupt does not wipe the slate clean as the Official Receivers/Trustees in Bankruptcy have the powers under the Insolvency Act 1986 to interrogate your finances and asset position for the benefit of creditors and will, if necessary, seek your arrest if you fail to assist with this process.

Comment

If you’re considering bankruptcy or have been declared bankrupt, it’s advisable to seek professional legal and financial advice to understand your specific situation and obligations.