Insolvency

Question 1

Insolvency

Answer 1

Unable to pay one’s debts or discharge one’s liability.

Question 2

Process for becoming bankrupt

Answer 2

1. Filing for bankruptcy
2. Court review
3. Bankruptcy order

Question 3

Alternatives to bankruptcy

Answer 3

Debt repayment orders (DROs), no asset procedures (NAPs), Informal arrangements, debt consolidation, creditor compromise.

Question 4

Implications of being bankrupt

Answer 4

• Loss of control over assets
• Impact on credit rating
• Restriction on financial activities.
• Must report financial info to OA.
• Travel restrictions.

Question 5

When is a bank charge discharged ?

Answer 5

Automatic discharge - 3yrs or application if obligations have been fulfilled.

Question 6

Liquidation process

Answer 6

1. Appointment of liquidator
2. Liquidator takes control
3. Realizing company’s assets
4. Paying creditors
5. Investigation & reporting
6. Final distribution
7. Dissolution company

Question 7

Area 1 of Insolvency Law

Answer 7

A system for the efficient collection and equitable distribution of an insolvents property amongst creditors.

Question 8

Area 2 of Insolvency Law

Answer 8

Provide relief for insolvent individuals (e.g. discharge after 3yrs).

Question 9

Area 3 of Insolvency Law

Answer 9

Providing means by which insolvent individuals and businesses can enter into binding compromises with their creditors.

Question 10

Area 4 of Insolvency Law

Answer 10

Security enforcement procedures