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Luck runs out for Middlesbrough estate agent who undervalued his own house

06 July 2012 15:30

Insolvency Service

Mr Colin John Drummond, a bankrupt who previously traded in partnership with another as an Estate Agent, based in Middlesbrough, is now subject to five years' bankruptcy restrictions for gambling and giving away part of his house whilst insolvent, following an investigation by The Insolvency Service.

The investigation found Mr Drummond, who was insolvent at the time, sold a jointly owned property to a family member in November 2008, for more than £25,000 below its actual value. By doing so he prevented the money being available to pay his creditors whom he owed over £290,000.

On 29 March 2012, the Secretary of State for Business Innovation and Skills accepted a Bankruptcy Restriction Undertaking from Mr Drummond, whereby he agreed to abide by certain bankruptcy restrictions for a five year period.

The investigation also found that In August 2009 Mr Drummond entered into a formal Individual Voluntary Arrangement (IVA) with his creditors to make reduced payments to them. In 2010, he failed to comply with the terms of his IVA leading to its termination and resulting in his bankruptcy.

Mr Drummond admitted gambling after the failure of his IVA in 2010, losing in excess of £10,000. He lost more than £7,000 after the bankruptcy petition had been presented against him. Mr Drummond even continued to gamble after his bankruptcy order was made, spending a further £2,000 of money that should have been paid to his creditors in bankruptcy.

Mr Dave Elliott, Official Receiver at Stockton, commenting, said:

“The Service is sending out the message that people who are in financial difficulties should not waste money by gambling or valuable gifts before bankruptcy. Spare money should go to people who are owed money. Bankruptcy Restrictions will provide protection for future creditors.”


Notes to Editors

1. The bankruptcy petition was presented by Clear Debt Limited, the supervisor of Mr Drummonds IVA, on 14/2/2011. The Bankruptcy order was made on 28 April 2011 in the Middlesbrough County Court.

2. The actual allegations in this case are:

  • In November 2008, at a time when he was insolvent, Colin John Drummond (“Mr Drummond”) entered into a transaction to the detriment of his creditors in that he sold a jointly owned property, with an estimated value of £168,000, to a family member for £25,200 less than its value.
  • Between 10 December 2010 and 27 April 2011, whilst insolvent and after the failure of an Individual Voluntary Arrangement that had been accepted by his creditors, Mr Drummond disposed of £10,970 of his income to the detriment of his creditors. Mr Drummond used the £10,970 to gamble with, and lost £7,285 of it after the bankruptcy petition had been presented against him.
  • At the date of the Bankruptcy Order Mr Drummond had a £2,059 credit balance in an on-line gambling account, which he disposed of by gambling.

3. The Insolvency Service investigates misconduct to ensure that bankruptcy restrictions are extended in appropriate cases. Bankrupts who have conducted their financial affairs properly generally have bankruptcy restrictions for the standard period of one year.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from

5. A Bankruptcy Restriction Order (BRO) is a court order imposing certain restrictions on a bankrupt for between two and 15 years. A Bankruptcy Restriction Undertaking (BRU) has the same effect as a BRO but does not involve going to court. They have been introduced to ensure the small minority who are reckless or dishonest are subject to the restrictions for between two and 15 years. A breach of a BRO or BRU is a criminal offence.

6. The restrictions imposed by a BRO or BRU are the same as those that apply to an undischarged bankrupt, namely:

  • The person must disclose their status to a credit provider if they wishes to obtain credit of more that £500.
  • The person must disclose their status to those they wish to do business with the name (or trading style) under which they were made bankrupt.
  • The person must not act as the director of a company or take part in its promotion, formation or management unless they obtain permission from the court to do so.
  • The person may not act as an insolvency practitioner or as receiver or manager of the property of a company on behalf of debenture holders.

In addition to the above the person also:

  • May not be a Member of Parliament in England and Wales
  • May not act as a local councillor
  • May not hold the office of school governor
  • May not hold other positions as contained in other legislation (The Insolvency Service has no control over the restrictions contained in other people’s legislation or in the rules of associations or governing bodies or professions).

7. Media Enquiries should be directed to: Kathryn Montague, Media Relations Manager Telephone number 020 7674 6910 or Ade Daramy, Press Officer, on 020 7596 6187.


Contact Information

Ade Daramy
Ade Daramy
Job Title
Insolvency Service
020 7596 6187