Chapter 26 - Proof of debts bankruptcy Flashcards
If a trustee rejects a proof of debt, how long does the creditor have to apply to court to vary the trustees decision?
21 days
What is a provable debt in bankruptcy?
- A debt to which the bankrupt is subject to at the commencement of bankruptcy
- A debt to which bankruptcy may become subject to after the commencement of the bankruptcy by reasons of obligations before bankruptcy eg. HP agreements
- Interest on the above is provable
In Bankruptcy, what debts are not provable?
- Any fine imposed for an offence
- Obligations in family or domestic proceedings
- Obligations under child support
- student loans
- foreign taxes
What debts are provable in bankruptcy but will not be written off on discharge of bankruptcy?
- Matrimonial lump sum orders
- Damages for personal injury
- Fraud
Where a bankruptcy debt bears interest, is in provable?
Yes - up to date of bankruptcy order
What is the current statutory interest on debts?
8%
Is interest in respect of any period after the commencement of the bankruptcy provable?
No
Bankruptcy - interest is paid after all debts have been paid in full.
Does the interest payable rank equally even if the debts do not rank equally?
Yes
Late Payment of Commercial Debts interest runs from when?
30 days after the supplier performs his obligation under contract
Proving in bankruptcy, what interest rate is used to convert foreign debts?
Converted into sterling at the official rate as at close of business on the date of bankruptcy order
Proving in bankruptcy - what happens with discounts?
All discounts available to bankrupt must be deducted, eg trade discounts but NOT early settlement discounts
If a secured creditor voluntarily surrenders his security, can they prove in the bankruptcy?
Yes, they may prove for the full debt
What is the formula for discounting a future debt?
X/1.05^n
X = amount of debt
n = amount of time from bankruptcy to date debt is due
Should the primary creditor or the guarantor prove in the bankruptcy?
The primary creditor
Are foreign taxes provable in bankruptcy?
No
EU tax is provable (except Denmark)
Are gambling debts provable in bankruptcy?
No
True or False - a claim for rent payment in advance which straddles the date of the bankruptcy order should be admitted in full
True
In general - in what time period are debts statute barred?
6 years
Mortgages 12 years (as contract under seal)
Personal injury - 3 years from when damage becomes apparent (not from date of injury)
Where do debts to spouses rank in bankruptcy?
After all other debts and interest has been paid
NOID - how much time must creditors have to prove once NOID has been issued?
At least 21 days
Within what time period must a dividend be declared after NOID has been issued?
Within 2 months from the last date of proving
Within what time frame must the trustee deal with creditors proofs after issuing NOID.
The trustee must, within 14 days from the last date of proving, deal with every creditors proof.
What must be included in notice of dividend?
- Amounts realised from sale of assets
- Payments made by trustee
- Provision made of unsettled claims and funds retained for particular purpose
- Total amount to be distributed and rate of dividend
- Whether, and if so when, any further dividend is expected to be declared.
Is a claim for damages arising from an allegation of assault provable in bankruptcy?
Yes
Is a claim by US revenue for unpaid taxes provable in bankuptcy?
No
Is post commencement interest on a bankruptcy debt provable?
No
Is a claim for future rent by landlord provable in bankruptcy?
Yes
Is student loans provable in bankruptcy?
No
Are lump sum orders in matrimonial proceedings provable in bankruptcy?
Yes but unlike other provable debts they are not discharged by the bankruptcy
Are obligations arising under an order for periodic payments made in family or domestic proceedings provable in bankruptcy?
No
A trustee must give notice of intention to declare a dividend to who?
Those creditors to whom he is aware who have not proved in the bankruptcy
