Bankruptcy (M1)

Question 1

When a debtor petitions for their own bankruptcy, is this:
A Via an approved intermediary
B Application by the debtor

Answer 1

B Application by the debtor

Question 2

What is the fee to petition for own bankruptcy?

Answer 2

£680 (Adjudicator fee 130 plus a deposit of £550)
Must be paid in advance
Can be paid by instalments

Question 2

Conditions of domicile for bankruptcy?

Answer 2

COMI must be in England & Wales; or has an establishment in England & Wales and either
 Domicile; or
 Ordinarily resident / place of residence in previous 3 years;
or  Carried on business in previous 3 years

Question 3

How long does adjudicator have to decide whether to make someone bkt?

Answer 3

28 day determination period

Question 4

How long is adjudication period extended if adjudicator requests further info more than 14 days after application?

Answer 4

Period extended by 14 days

Question 4

What is the minimum debt to present a creditor petition?

Answer 4

£5,000

Question 4

What is the creditor petition fee in bankruptcy?

Answer 4

Fee:£1,802
 £1,500 petition deposit
 £302 court costs

Question 5

What are the conditions to present a creditor’s petition?

Answer 5

Debtor appears to be unable to pay or to have no reasonable prospect of paying

Petition debt(s) must:
 Be equal to or exceed the limit
 Liquidated, payable immediately or at a certain future time and unsecured

 No outstanding application to set aside a statutory demand

Question 6

What is the definition of “inability to pay” immediate debts (bky)?

Answer 6

(1) For the purposes of section 267(2)(c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either—
(a)the petitioning creditor to whom the debt is owed has served on the debtor a demand (known as “the statutory demand”) in the prescribed form requiring him to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules, or
(b)execution or other process issued in respect of the debt on a judgment or order of any court in favour of the petitioning creditor, or one or more of the petitioning creditors to whom the debt is owed, has been returned
unsatisfied in whole or in part.

Question 7

What is the definition of “inability to pay” FUTURE debts (bky)?

Answer 7

(2)For the purposes of section 267(2)(c) the debtor appears to have no reasonable prospect of being able to pay a debt if, but only if, the debt is not immediately payable and—
(a)the petitioning creditor to whom it is owed has served on the debtor a demand (also known as “the statutory demand”) in the prescribed form requiring him to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due,
(b)at least 3 weeks have elapsed since the demand was served, and
(c)the demand has been neither complied with nor set aside in accordance with the rules.

Question 8

Can secured creditors present a bky petition?

Answer 8

YES
A creditor with security may present a petition if:
 the petition contains a statement that the creditors is willing to give up their security for the benefit of all the bankrupt’s creditors, or
 They place an estimated value on their security and present the petition in respect of the unsecured element

The secured and unsecured parts of the debt are treated as separate debts

Question 9

How many days notice of a bankruptcy hearing must the debtor receive?

Answer 9

A minimum of 14 days

Question 10

How many days prior to the bankruptcy hearing must the petitioner file certificate of service with the court?

Answer 10

Not less than 5 business days prior to hearing

Question 11

When presenting a petition, how must the petition be served?

Answer 11

Petition must be personally served on the debtor
 Or make an application to court for substituted service

Question 12

Who can attend a bky hearing

Answer 12

 the petitioning creditor
 the debtor
 the supervisor of any individual voluntary arrangement (IVA) in force for the debtor
 any creditor who has given notice of their intention to appear

Question 13

What happens if the petitioner fails to attend the bky hearing?

Answer 13

The petition is dismissed and the petitioner cannot present another petition for the same debt without the permission of the court

Question 14

How long can the court adjourn a bky hearing if the debtor has not been served

Answer 14

21 days

Question 15

How must a statutory demand be served?

Answer 15

Personal service, or substituted service

Question 16

When a debtor has been served with a statutory demand, how many days do they have:
A To pay
B To apply to set aside

Answer 16

A 21 days to pay or secure

B 18 days to apply to set aside

Question 17

When must creditors give notice if they wish to support a bankruptcy petition?

Answer 17

Up to 4pm on day before hearing

Question 17

if a debtor wishes to oppose a bankruptcy petition:
A when must he file notice?
B how?

Answer 17

A: At least 5 BUSINESS days before hearing

B: Statement of truth

Question 18

Can a bankruptcy petition be heard less than 21 days after stat demand has been presented?

Answer 18

Yes:
the petition may be presented before the end of the 3- week period there mentioned if there is a serious possibility that the debtor’s property or the value of any of his property will be significantly diminished during that period and the petition contains a statement to that effect.

Question 19

Who else can petition for a debtor’s bankruptcy?

Answer 19

 Supervisor of an IVA
 Any person (other than the individual) who is bound by the IVA
 The Official Petitioner under the Criminal Courts Act 1973
 The administrators or executors of the insolvent estate of a deceased person

Question 20

On what basis can the supervisor/ creditor in an IVA present a bky petition?

Answer 20

The supervisor or other person bound by an IVA may present a petition

The court will not grant the order unless:
 The debtor has failed to comply with his obligations under the voluntary arrangement; or
 The information provided by the debtor was false or misleading in any material particular or contained material omissions; or
 The debtor has failed to do all such things as may for the purposes of the IVA have been reasonably required of him by the supervisor
 There is no requirement that the debts are in excess of £5,000
 A supervisor’s petition will need to be in accordance with the breach/ termination terms of the arrangement

Question 21

Interim receivers

Answer 21

 Appointed when necessary to protect the debtor’s property
 Can bea ppointed at any time after the presentation of a bankruptcy petition and before making a bankruptcy order
 Official Receiver or an IP
 Interim receiver takes immediate possession of the debtor’s property
 Debtor must provide an inventory of his property and such other information, and shall attend on the interim receiver at such times as reasonably required
 Halts all execution and other legal processes
 Appointment ends when Order made or petition dismissed
 Covers all debtor’s property, even if not part of his estate in bankruptcy

Question 22

What details are on a bankruptcy order?

Answer 22

Order States:
 Date of application or petition and date of order
 A statement that the OR is trustee of the bankrupt’s estate
 A notice of the bankrupt’s duties in relation to the OR under s291(4)

Question 23

When is a bkt discharged?

Answer 23

A bankrupt is discharged from bankruptcy at the end of the period of one year beginning with the date on which the bankruptcy commences
 Unless:
 that period is suspended on the application of the OR or trustee;or
 The court orders the annulment of the bankruptcy order; or
 Where a criminal bankruptcy order has been made

Question 24

Before petitioning to make somebody bankrupt, how far back do they have to check for previous bankruptcy petitions?

Answer 24

18 months

Question 25

Where must a bankruptcy petition be presented?

Answer 25

How you present the petition will depend on the debtor’s circumstances.

Submit the petition online if the debtor either:

lives in London and owes you £50,000 or more
has ‘no fixed abode’ (no fixed or regular address)
It’ll go to the High Court.

Otherwise, give the petition in person to the county court nearest to where the debtor lives or works.If the debtor owns a business

Choose the court nearest to the debtor’s business address unless this changed in the last 6 months and they’ve been at their home address longer.

Government departments, including HM Revenue and Customs (HMRC), present all petitions in London.