Bankruptcy Bankruptcy is the legal procedure for dealing with personal insolvency. Bankruptcy collects the assets of the insolvent debtor and distributes them amongst his creditors proportionately. It also has the effect of protecting a debtor from legal enforcement by his creditors. Bankruptcy is the equivalent of liquidation in the case of an insolvent company and […]
Procedure A petition is an application to Court for a bankruptcy order and may be made by a creditor, the debtor himself or the supervisor or a creditor of a failed voluntary arrangement. Bankruptcy commences when the Court makes a Bankruptcy Order. Some aspects of bankruptcy are backdated to the date when the petition was […]
Bankruptcy Order Once a Bankruptcy Order is made by the Court, the bankrupt person becomes subject to the legal restrictions and consequences that arise from bankruptcy. The Enterprise Act which was introduced in 2002, was designed to remove some of the stigma and disadvantages of bankruptcy. The Official Receiver (who is a Government official) takes […]
Bankrupt’s estate The Official Receiver’s must gather in and protect the bankrupt’s estate. A bankrupt’s “estate” refers to all of his assets at the time of commencement of bankruptcy. This includes all his assets whatsoever, future or present. A bankrupt’s estate vests in the bankruptcy trustee immediately on his appointment. These assets are available to […]
Duties of Bankrupt The bankrupt person has a number of duties and obligations. He must not obtain credit in excess of £500.00 without disclosing his bankrupt status. He may only trade in the bankruptcy name. He may be precluded from certain professions including solicitors, accountants, etc. A partnership in which a bankrupt was a member […]
The Interim Protective Order The interim order in an IVA protects the debtor from legal proceedings and enforcement action during the time his proposal is being formulated for submission to the creditors. It may not be necessary where there are a small number of creditors involved only. The effect of the protection is that it […]
Overview The IVA proposal will become a legally binding agreement between the debtor and his creditors upon acceptance by 75% in value of the creditors, provided that no court objection is made and upheld. The debtor and creditors are free to make whatever provision they see fit, in the context of the framework of the […]