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insolvency > Chapter 20 - Bankruptcy > Flashcards

Chapter 20 - Bankruptcy Flashcards

1
Q

Informal options for a person facing financial difficulties (4)

A
  • Informal Arrangement
  • Re-mortgage
  • Consolidate Loans
  • Debt management plans
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2
Q

Formal options for a person facing financial difficulties

A
  • IVA
  • Bankruptcy
  • Debt Relief order
  • Temporary Debt Respite order
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3
Q

What are the three routes into bankruptcy?

A
  • Debtor application
  • Creditor application
  • Supervisor of a defaulted IVA
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4
Q

If a debtor has already had a Debt Relief Order, in what time period would they be eligible to apply for a another DRO?

A

Will not be eligible to apply for a DRO again for a period of 6 years

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5
Q

Debt Relief Order eligibility criteria

A
  • be unable to repay debts
  • have unsecured debts of under £30,000
  • have assets less than £2,000
  • have surplus income of less than £75 per month
  • lived or worked in England or Wales in last 3 years
  • No pending bankruptcy petition or DRO in last 6 years
  • not be involved in any other formal insolvency proceedings at the time of application of DRO.
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6
Q

How long does a Debt Relief Order last?

A

12 months

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7
Q

Will the debtor be protected from enforcement action by the creditors included in the Debt Relief Order?

A

Yes

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8
Q

Will a debtor be free from the debts at the end of the Debt Relief Order?

A

Yes

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9
Q

Can a debtor subject to a Debt Relief Order manage a limited company or act as a director?

A

No

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10
Q

What are the obligations of a debtor subject to a Debt Relief Order (4)

A
  • Must comply with OR’s request for info
  • Inform the OR of any assets obtained/increases in income
  • Must not obtain credit of £500 or more without disclosing the DRO
  • Not make payments direct to creditors included in the DRO
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11
Q

Temporary Debt Respite - how long does it last?

A

60 days

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12
Q

What is a county court administration order?

A

Debtor unable to satisfy a County Court Judgement
Have at least 2 creditors totalling no more than £5k

If made the administration order will provide for the payment of the total debt in instalments

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13
Q

What percentage of creditors have to agree to an IVA?

A

75%

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14
Q

How long does a bankruptcy last?

A

1 year

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15
Q

What is the threshold for someone petitioning for bankruptcy?

A

£5,000

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16
Q

When is a bankruptcy deemed to have commencted?

A

Date of bankruptcy order

(it is not backdated to petition as in liquidation)

17
Q

What are the grounds for a creditors application for bankruptcy and what is the proof?

A

Grounds: inability to pay debts

Proof: Service of Statutory Demand and 21 days has lapsed or

Unsatisfied judgement execution

18
Q

Bankruptcy - How long must there be between serving petition and the hearing?

A

14 days

19
Q

Bankruptcy - if a creditor serves a statutory demand:
- how long does debtor have to pay
- how long does debt have to apply to set aside demand

A

21 days

An application to set aside a demand must be made within18 days after service of the demand. Debtor must show sufficient cause for setting aside:
- debt is disputed
- debt is secured
- debt has a counter claim at least equal to demand

20
Q

What is a limit for a lower value bankruptcy?

A

On a creditors petition lower value is less than £50,000

On a debtors petition lower value is less than £100,000

21
Q

Is a petition for bankruptcy advertised?

A

No, the petition is not advertised unlike in compulsory winding up proceedings.

22
Q

On what grounds can a debtor apply for bankruptcy?

A

Inability to pay debts

Proof = statement of affairs

23
Q

Debtors application for bankruptcy - within what time frame must the adjudicator determine whether to make a bankruptcy order

A

Within 28 days from the date the bankruptcy order was made

24
Q

Debtors applications for bankruptcy, what are the four conditions the adjudicator has to consider?

A
  • Adjudicator has jurisdiction to make order (COMI of debtor is in England and Wales)
  • Debtor is unable to pay their debts
  • No pending bankruptcy petitions
  • no bankruptcy order has been made in respect of any o the debts which are the subject of the application.
25
Q

Debtor application for bankruptcy - if adjudicator requests more information more than 14 days from the date of the bankruptcy application then the determination period is extended by how long?

A

14 days

26
Q

Once the OR has received a debtors application bankruptcy order, how long do they have to:
Gazette
Apply to Chief Land Registrar
Entry to be made to Individual Insolvency Register

A

As soon as reasonably practicable

27
Q

If adjudicator rejects a debtors application for bankruptcy, within what time frame can the debtor ask for a review?

A

Within 14 days

this is not an opportunity to provide more into. and debtor must give reasons for requesting review.

28
Q

If adjudicator confirms refusal of bankruptcy after debtor has asked for a review, in what time frame can the debtor appeal to court?

A

Within 28 days from the date of delivery of the notice confirming the refusal.

29
Q

What are the three grounds for a Supervision presenting a petition for bankruptcy?

A
  • Failure to comply with obligations under IVA
  • Giving false or misleading material information or making a material omission in any stmt at creditors meeting
  • Failure to comply with supervisors reasonable requests.
30
Q

What is the prescribed limit on a debtors application for bankruptcy?

A

There is no limit

The debtor has to prove his inability to pay debts by providing the personal information set out in Schedule 2A to the rules.

31
Q

Can the trustee of bankruptcy challenge validity of transactions?

A

Yes if they appear to be preference or at undervalue

insolvency (16 decks)

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