Overview Bankruptcy law is designed both to assist creditors and protect debtors. In the absence of insolvency law, a creditor who is first to obtain a judgment/court order and enforce against a debtor could potentially take and keep all the debtor’s assets to the exclusion of all other unsecured creditors. This would lead to a race to enforce and would […]
Vesting of Bankrupt’s Assets All property and assets belonging to the bankrupt vest in the Official Assignee for the benefit of creditors, subject to certain exceptions. The bankrupt must notify the Official Assignee of property later acquired. Where a trustee in bankruptcy is appointed, the assets then vest in the trustee. Vesting takes place automatically. The property which vests in […]
The Official Assignee The Official Assignee’s office was transferred from the Courts Service to the Insolvency Service under the Personal Insolvency Act 2012. The Official Assignee is a member of the staff of the Insolvency Service. In relation to matters of general administration, he is subject to the general direction of the Director of the Insolvency Service. A Deputy Official […]
Powers and Functions of Official Assignee I The functions of the Official Assignee are to get in and realise the property, to ascertain the debts and liabilities and to distribute the assets in accordance with the Bankruptcy Act. The Official Assignee may in case of doubt or difficulty seek the directions of the Court in connection with the affairs of any […]
Adjustment of Bankrupt’s Estate There are provisions in the Bankruptcy Act allowing the Official Assignee or trustee to get rid of onerous property and to reclaim assets that have been wrongfully transferred by the bankrupt. The former provision facilitates the disclaiming of assets which carry liabilities which may drain the bankrupt’s assets. There is a single provision in relation to […]
Order of Entitlement In bankruptcy, the trustee in bankruptcy or Official Assignee takes control of all of the debtor’s assets, except a limited number of excluded assets, and sells or realises them for the benefit of the creditors. In distributing the proceeds of the sale of the bankrupt’s assets, the fees and expense of the bankruptcy official are first deducted. […]
Income (pre 3/12/2013 Provisions) The Official Assignee can apply to the court for directions regarding the bankrupt’s income. This power applies to earned and unearned income including pensions in payment. The provision in relation to income and pensions were reformed in 2013. The first paragraphs deal with the earlier position and the later paragraphs deal with the reformed position The […]
Discharge and Termination I An individual is subject to bankruptcy restrictions until he is discharged from bankruptcy. A discharge frees the debtor from all pre-bankruptcy liabilities.Upon discharge the bankrupt is discharged from debts which could have been proved for in the bankruptcy. No further recovery may be had from the bankrupt. Upon discharge, there may be continuing obligations on the […]
Partnerships and Insolvency Partnerships constitute an important mechanism for undertaking business. In certain sectors, such as the legal profession, a business may not be incorporated as a company and must practice as sole traders or partnerships. A partnership will arise automatically, where persons undertake business in common. A partnership is not a separate legal entity. Ultimately, the partners are fully […]
Insolvency cross-border issue. There is an EU wide Regulation on cross-border insolvency. It does not seek to harmonise laws in the area of insolvency as such. Instead, it provides mandatory rules as to which jurisdiction must be recognised as pre-eminent and requires co-operation and assistance by the courts and authorities of other EU states. The basic rule is the courts […]