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Insolvency > Chapter 23 & 24 - Bankrupts Estate > Flashcards

Chapter 23 & 24 - Bankrupts Estate Flashcards

1
Q

Bankruptcy - what assets are excluded from the bankrupts estate?

A
  • Tools/books/vehicles that are necessary for bankrupts employment
  • Clothing/bedding/furniture for basic domestic needs
  • Property held on trust for another person
  • Rights under approved pension schemes
  • Income for domestic needs
  • Assets forfeited on making of the order
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2
Q

Items of excess value S309 - Trustee must serve notice within what time period when they become aware of property?

A

S309 trustee must serve notice within 42 days from the date on which the property in question first came to his knowledge

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3
Q

Items of excess value S309 - what is the effect of the Trustee serving notice?

A
  • Property vests in trustee
  • Trustee now has a duty to apply estate funds to purchase a reasonable replacement for property recovered under S309.
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4
Q

Income payments order - what would the trustee see as excessive expenditure when looking at an IPO?

A
  • Private health insurance
  • Gambling
  • Alcohol
  • Tobacco
  • Subscriptions to TV services
  • Excessive mortgage payments
  • Charitable donations
  • Voluntary payments to pension schemes
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5
Q

How much notice must a trustee give to a bankrupt for an Income Payment Order application?

A

Trustee must give 28 days notice to bankrupt, together with a copy of the application and a short statement for the grounds of the application.

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6
Q

If a bankrupt has received notice of an Income Payment Order, what are his two options?

A
  • Consent in writing to the application to court and trustee at lease FIVE business days before the hearing or
  • Attend the hearing and show reason why the order should be other than that applied for
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7
Q

If a trustee looks to apply for an Income Payment Order, how much should be left over for the bankrupt?

A

The order must leave the bankrupt with sufficient income for meeting the reasonable domestic needs of their family.

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8
Q

Bankruptcy - what is the maximum duration for an Income Payments Order?

A

3 years from date of agreement

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9
Q

Bankruptcy - what is an Income Payment Agreement?

A

A written agreement made between the bankrupt and his trustee by which the bankrupt voluntarily agrees to pay a specific sum to the estate for a specific time period.

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10
Q

Bankruptcy - after acquired property - in what time period must the debtor advise the trustee of after acquired property?
When must trustee give notice to bankrupt to claim this property

A

within 21 days of becoming aware of the asset

Trustee has 42 days to serve notice to claim property

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11
Q

Bankruptcy - can a creditor retain the benefit of an execution if that was not completed and sums paid before bankruptcy commenced?

A

No

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12
Q

Bankruptcy - execution - a court enforcement officer must hold funds over what value for how many days before handing over?
What happens if there is a bankruptcy order in this time period?

A

If sum of over £1000 obtained, CEO must hold for 14 days.
If during this time he is notified of a bankruptcy petition, he must hand over the balance to the trustee after deduction of costs.

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13
Q

Does Commercial Rent Arrears Recovery (CRAR) apply when a trustee has been appointed?

A

Yes
but there are 3 restrictions

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14
Q

What are the three restrictions to CRAR in a bankruptcy?

A
  • CRAR 3 months before bankruptcy
    Proceeds will be charged with payment of preferential creditors, landlord now ranks as preferential
  • CRAR post order in respect of pre order rent arrears
    limited to 6 months rent accrued pre order
  • CRAR between petition and order
    six month rule should be applied first
    Then the 3 month rule should be applied
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15
Q

Bankruptcy - Transactions at undervalue - what is the relevant time?

A

S339
5 years pre-petition

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16
Q

Bankruptcy - Transactions at undervalue - is there a need to show insolvency?
Is it assumed?

A

S339
pre-petition
0-2 years - No
2-5 years - Yes

Insolvency presumed it to a associate

17
Q

Bankruptcy - Preferences - what is the relevant time?

A

S340

6 months - non associate
2 years pre-petition - to associate

18
Q

Bankruptcy - Preferences - what has to be shown?

A

S340
Always have to show insolvency

Have to show desire to prefer - it is assumed if it is to an associate

19
Q

Bankruptcy - Extortionate credit transaction - what is the relevant time?

A

S343
3 years pre bankruptcy order

20
Q

Bankruptcy - Extortionate credit transaction - do you have to show insolvency?

A

S343
No

21
Q

Bankruptcy - Extortionate credit transaction - is anything presumed?

A

S343
Presumed to be extortionate, onus is on the loan company to show it is not

22
Q

Bankruptcy - Transactions defrauding creditors - what is the relevant time?

A

S423
Anytime

23
Q

Bankruptcy - Transactions defrauding creditors - do you have to show insolvency and is anything presumed?

A

S423
No and No

24
Q

Bankruptcy - Post petition dispositions - what is the relevant time?

A

S284
Between petition and the vesting of the estate in the trustee

25
Q

Bankruptcy - Post petition dispositions - do you have to show insolvency and is anything presumed?

A

S284
No and No

26
Q

Bankruptcy - Excessive Pension Contributions - what is the relevant time?
Do you have to show insolvency?
Is anything presumed?

A

S342A to C
Anytime
No
No

27
Q

Bankruptcy - if there is no deed of trust setting out the split of equity for a jointly owned home, what percentages are assumed?

A

50:50

If one party claims it is more than 50%, then the burden of proof is on them.

28
Q

Bankruptcy - when would rights of occupation of home occur and for what time period?

A

12 month delay

  • Non bankrupt spouse has right of occupation
  • Bankrupt has right of occupation where he has a beneficial interest in the property and any person under 18 has home with bankruptcy
29
Q

Within what time period must the trustee deal with the bankrupts interest in a dwelling house in order to prevent it re-vesting in the bankrupt?

A

Within 3 years of the date of bankruptcy order

30
Q

The court will not grant a charging order it the value of the bankrupts equity is below the prescribed amount, what is this amount?

A

£1,000

31
Q

Under what section of the Act may a trustee apply for a charging order on the debtors bankrupts home?

A

S313

32
Q

Which if the following matters will the court not take into account when looking at an application for an order of possession and sale made by trustee?
A - Interests of the bankrupt creditors
B - Conduct of spouse as contributing to bankrupt
C - Bankrupts Interest
D - Needs of any children
E - All circumstances of the case

A

C Bankrupts interest S336

33
Q

Can a trustee call a final meeting to obtain his release if he has been unable to realise an interest in a dwelling unless he has applied to court for a charge?

A

No

34
Q

How can a trustee prevent automatic re-vesting of a property within the 3 year time period?

A
  • Realise the interest in the property
  • Apply for order for sale or possession
  • Apply for a S313 charge
  • Enter into an agreement with the bankrupt, whereby bankrupt gets property back in return for a promise to pay money into the estate in the future
35
Q

A trustee is required to service notice to state that the dwelling house of the bankrupt is one that the 3 year rule applies.
What is the latest time a trustee can serve notice?

A

Notice cannot be served any later than 14 days prior to the expiration of the 3 year period.

36
Q

What is the maximum value of a charge that can be imposed on the bankrupts home under S313 of the insolvency Act 1986?

A

The value of the bankrupts interest in the property at the date of the charging order plus statutory interest

37
Q

A windfall may be clawed back for the estate by the trustee in bankruptcy providing it was acquired by the bankrupt within what time frame?

A

before the expiry of one year beginning with the bankruptcy order

38
Q

In bankruptcy from what date is the bankrupts estate deem vested in the trustee?

A

Appointment of trustee

39
Q

Does a trustee need to seek directions from court on matters of commercial judgement?

A

No

Insolvency (23 decks)

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