Bankruptcy (M1) Flashcards
When a debtor petitions for their own bankruptcy, is this:
A Via an approved intermediary
B Application by the debtor
B Application by the debtor
What is the fee to petition for own bankruptcy?
£680 (Adjudicator fee 130 plus a deposit of £550)
Must be paid in advance
Can be paid by instalments
Conditions of domicile for bankruptcy?
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
How long does adjudicator have to decide whether to make someone bkt?
28 day determination period
How long is adjudication period extended if adjudicator requests further info more than 14 days after application?
Period extended by 14 days
What is the minimum debt to present a creditor petition?
£5,000
What is the creditor petition fee in bankruptcy?
Fee:£1,802
£1,500 petition deposit
£302 court costs
What are the conditions to present a creditor’s petition?
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
What is the definition of “inability to pay” immediate debts (bky)?
(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.
What is the definition of “inability to pay” FUTURE debts (bky)?
(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.
Can secured creditors present a bky petition?
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
How many days notice of a bankruptcy hearing must the debtor receive?
A minimum of 14 days
How many days prior to the bankruptcy hearing must the petitioner file certificate of service with the court?
Not less than 5 business days prior to hearing
When presenting a petition, how must the petition be served?
Petition must be personally served on the debtor
Or make an application to court for substituted service
Who can attend a bky hearing
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
What happens if the petitioner fails to attend the bky hearing?
The petition is dismissed and the petitioner cannot present another petition for the same debt without the permission of the court
How long can the court adjourn a bky hearing if the debtor has not been served
21 days
How must a statutory demand be served?
Personal service, or substituted service
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
A 21 days to pay or secure
B 18 days to apply to set aside
When must creditors give notice if they wish to support a bankruptcy petition?
Up to 4pm on day before hearing
if a debtor wishes to oppose a bankruptcy petition:
A when must he file notice?
B how?
A: At least 5 BUSINESS days before hearing
B: Statement of truth
Can a bankruptcy petition be heard less than 21 days after stat demand has been presented?
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.
Who else can petition for a debtor’s bankruptcy?
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
On what basis can the supervisor/ creditor in an IVA present a bky petition?
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
Interim receivers
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
What details are on a bankruptcy order?
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)
When is a bkt discharged?
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
Before petitioning to make somebody bankrupt, how far back do they have to check for previous bankruptcy petitions?
18 months
Where must a bankruptcy petition be presented?
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.
