Chapter 6 Flashcards
(38 cards)
Before the court will make a bankruptcy order one needs to be proved and how
The debtors inability to pay must be proved
This can be proved by not complying within three weeks of the statutory demand to pay
They can show that the creditor has sued and had obtained a judgement through the bailiff system to sell their property but they have been unsuccessful in whole or in part
What can the debtor not to do after the presentation of a petition for bankruptcy
They can not sell any goods or property after the petition has been presented unless the court has approved the transaction
Who takes control of the debtors property once the court makes the bankruptcy order
The official receiver takes control
What is the function of the trustee in bankruptcy
To access realise and distribute the bankruptcy estate and to pay the creditors
How does bankruptcy trust work
Every bankruptcy is effectively a trust in that the trustee in bankruptcy holds the bankrupts property on trust for the creditors in general
List the property that does not form part of the bankruptcy order and will not pass to the trustee in bankruptcy
Tools box vehicles that are required for employment business or vacation
Clothing bedding furniture household equipment and provisions for basic needs of them and their family
Property held by the bankrupt on trust for any other person
At which point can I trust him bankruptcy assign property back to the bankrupt
Once the bankrupt has been discharged
How long do the administers of bankruptcy have to sell the property in which they and adult children live
They have up to 3 years in which to deal with the bankrupt interest in their main home after that the property will revert to the former bankrupt I will no longer form part of the bankruptcy estate the trustees have three options
Realise the interest
Apply for an order of sale possession
Apply for a charging order over the premises
Enter into an agreement with the bankrupt regarding the interest
What happens when there is a joint property in bankruptcy
The trustees May be unable to realise and interest if it is a property in joint names where there is legal
interest or where no legal interest they may have a statutory right of occupation
The property cannot be sold without a court order if they are married with a residential children and cohabitees do not have the same legal rights
There can be no affection unless the court consents where…
With the bankrupt as beneficial interest are you entitled to all a part of the proceeds
The bankrupt has a right of occupation and the homes of divide by miners when the petition was presented
How much does a creditor need to owe in and secured debt before bankruptcy procedures can commence
£750 however from October 2015 this figure will increase to £5000
What is the role of the official receiver
They will investigate the bankrupts affairs when necessary and send a report to creditors
They will call a meeting of the creditors and a vote on the appointment of an insolvency practitioner as the trustee in bankruptcy or when the meeting is held difference receive it becomes trustee in bankruptcy
What is the aim of the trustee in bankruptcy
Just realise the assets and divide the proceeds between the creditors
If there is not enough money realised from the sale of the assets the money raised is applied in strict order of priority
What is the order of payment of debts for bankruptcy
Secured debts Expenses of the bankruptcy Employees wages up to 4 months plus holiday pay/pension scheme contributions Unsecured creditor including tax and VAT Interest on debts since BRO Debts to spouse
How long does the bankruptcy normally continue
Normally one year after which it is automatically discharged
What are the things are bankrupt must not do under the restrictions of the order
Obtain credit of mine £500 from Belinda
Trade under any name except their current
Act as a director of a company
Work is an insolvency practitioner
What other things are bankrupt must not do
Conceal any debts from the trustee
Destroy or falsify records
Peaked false statements
Dispose of property to defraud
Fraudulently give preference to one creditor of another
Leave the country and take any of the property with them
How long before the petition can the bankrupt not to sell an asset for undervalue
Within five years before the petition for the court can apply to have the transactions that aside, two years providing the debt is insolvency at the time
What is preference is relating to bankruptcy
Rules preventing favouring some creditors over the other this is called preference
Who remains the owner of the investments of the bankruptcy after the bankrupt is discharged
They remain the ownership of the trustee
What are the effects of bankruptcy on investments
The trustee takes over them and can surrender any isa’s and life assurance bonds or investment if it is a joint account it becomes owned jointly by the trustee and the other owner
What is the benefit of the married women’s property act 1882 on bankruptcy
This will make it almost totally protected from the trustee in bankruptcy
What is the effect of bankruptcy and pensions
Any rights under a registered pension scheme cannot be claimed this was introduced in the welfare reform and pensions act 1999 for bankruptcy orders made after 29 May 2000
Unregistered pensions such as EFERBS would not be protected
Impact on a trust of bankrupt of a settlor
It is not affecting the trust unless it can be attacked under the prior transaction provisions if a petition was presented with a two years of the transaction it can be set aside
