Personal insolvency Flashcards
(105 cards)
1
Q
What does IVA stand for in personal insolvency
A
Individual Voluntary Arrangement
2
Q
What is bankruptcy
A
Collective insolvency procedure for individuals
3
Q
What statute governs bankruptcy and IVAs
A
Insolvency Act 1986
4
Q
What are the Insolvency Rules year
A
2016
5
Q
What is an IVA similar to for companies
A
Company Voluntary Arrangement
6
Q
What does an IVA debtor propose
A
Compromise of liabilities with creditors
7
Q
Does an IVA usually involve paying the full contractual debt
A
No
8
Q
Is an IVA a flexible procedure
A
Yes
9
Q
Who supervises the implementation of an IVA
A
Licensed insolvency practitioner
10
Q
What is a common length for an IVA in practice
A
Three to five years
11
Q
Who assists the debtor in drafting an IVA proposal initially
A
Nominee
12
Q
What does the nominee report to the court about the IVA proposal
A
Reasonable prospect of approval implementation
13
Q
What order can a debtor apply for to freeze proceedings
A
Interim order
14
Q
What does an interim order bring about
A
Moratorium
15
Q
How long does the initial moratorium from an interim order last
A
Fourteen days
16
Q
What percentage of creditors by value must approve an IVA
A
At least 75%
17
Q
Can an IVA bind secured creditors without consent
A
No
18
Q
Can an IVA bind preferential creditors without consent
A
No
19
Q
Who becomes the Supervisor of an approved IVA
A
The Nominee
20
Q
To whom does the IVA Supervisor report periodically
A
The court
21
Q
What can an IVA Supervisor do if the debtor breaches the IVA terms
A
Petition for bankruptcy
22
Q
What happens to remaining pre-IVA debts at the end of a successful IVA
A
Creditors write off balance
23
Q
Does an IVA avoid the stigma of bankruptcy
A
Yes
24
Q
Can an IVA bind all unsecured creditors
A
Yes
25
Is a moratorium available with an IVA
Yes if interim order made
26
May an IVA last longer than bankruptcy
Yes
27
Can an IVA be an expensive process
Yes
28
Is creditor approval of an IVA certain
No
29
Who usually brings a bankruptcy petition
Creditor
30
Can a debtor bring their own bankruptcy petition
Yes
31
What is a ground for a creditors bankruptcy petition
Debtor unable to pay debts
32
What is the minimum debt for a creditors bankruptcy petition
Exceeding £5000
33
Must the debt in a creditors petition usually be unsecured
Yes
34
Where must the debtor usually be domiciled or present for a creditors petition
England and Wales
35
What is the only ground for a debtors bankruptcy petition
Debtor unable to pay debts
36
What must accompany a debtors bankruptcy petition
Statement of affairs
37
What is bankruptcy equivalent to for a company
Liquidation
38
How does the bankruptcy process begin
Bankruptcy petition presented
39
How is a debtors inability to pay debts evidenced
Unsatisfied statutory demand unsatisfied execution
40
How long does a debtor have to satisfy a statutory demand
Three weeks
41
What happens if a court is satisfied with a bankruptcy petition
May make bankruptcy order
42
Who becomes the first trustee in bankruptcy
Official Receiver
43
What is the first trustee in bankruptcy also known as
The Trustee
44
Can creditors appoint a different trustee
Yes majority can seek appointment
45
Must an appointed trustee be a licensed insolvency practitioner
Yes
46
What is a restriction for an undischarged bankrupt regarding company directorship
Prohibited from acting
47
What is a credit limit for an undischarged bankrupt without disclosure
Over £500
48
What happens to a bankrupts property upon a bankruptcy order
Vests in the Trustee
49
What does vesting mean in bankruptcy
Bankrupt gives up possession access
50
Does the trustee have wide powers to deal with the bankrupts assets
Yes
51
What can the trustee challenge to increase available assets
Voidable transactions
52
What type of property can a trustee disclaim
Onerous property or contracts
53
What is a key example of onerous property for a trustee to disclaim
Lease of land property
54
What must creditors do to claim a dividend in bankruptcy
Prove their claims
55
To whom do creditors provide evidence to support their claims
The Trustee
56
Who determines the amount of a creditors claim in bankruptcy
The Trustee
57
To whom does a trustee give notice before paying a dividend
Creditors who have proved debts
58
Is the bankruptcy order of priority the same as corporate insolvency
No
59
Who is paid first in bankruptcy order of priority
Secured creditors limited to security value
60
What is paid second in bankruptcy order of priority
Expenses of the bankruptcy
61
What is paid third in bankruptcy order of priority
Two tiers of preferential creditors
62
Who is paid fourth in bankruptcy order of priority
Ordinary unsecured creditors
63
What is paid fifth in bankruptcy order of priority
Statutory interest
64
Whose debts are paid sixth in bankruptcy order of priority but postponed
Debts of a spouse
65
Who is paid last in bankruptcy order of priority
The bankrupt if surplus
66
Do bankrupts have duties to the trustee
Yes
67
What is a key duty of a bankrupt to the trustee
Provide information assistance
68
What is a potential penalty for a bankrupt failing to comply with trustee duties
Imprisonment fines
69
When is a bankrupt generally automatically discharged
After maximum one year
70
What does discharge from bankruptcy mean
Released from most debts restrictions
71
Who can apply to suspend automatic discharge
Official Receiver or Trustee
72
Can a bankrupt be discharged in less than a year
Yes if no investigation needed
73
What does BRO stand for
Bankruptcy Restriction Order
74
Who can apply for a BRO
Secretary of State or Official Receiver
75
What is the timeframe for applying for a BRO generally
Within a year of bankruptcy start
76
What is the operating period for a BRO
Two to fifteen years
77
What is a restriction under a BRO regarding company directorship
Unable to act
78
What is a credit limit for someone with a BRO without disclosure
More than £500
79
Is breaching a BRO a criminal offence
Yes
80
What is an alternative to a BRO offered by the bankrupt
Bankruptcy restriction undertaking
81
What is the aim of challenging voidable transactions in bankruptcy
Increasing assets for creditors
82
Are the principles for individual voidable transactions the same as corporate
Similar but different timescales sections
83
What are the key voidable transactions for individuals
TUV Preferences TDC
84
What can the court order if a voidable transaction is found
Restore the position
85
What does TUV stand for regarding voidable transactions
Transaction at an Undervalue
86
What is a TUV
Gift marriage consideration significantly less value
87
What is the relevant time for a TUV claim
Within 5 years before petition
88
Is insolvency always required for a TUV claim
No only if between 2-5 years
89
Is insolvency presumed in a TUV with an associate
Yes subject to rebuttal
90
What is a preference in bankruptcy
Putting creditor in better position
91
What is the relevant time for a preference to an unconnected person
Within 6 months before petition
92
What is the relevant time for a preference to an associate
Within 2 years before petition
93
Must the individual be insolvent at the time of a preference
Yes or became insolvent as a result
94
Must a desire to prefer be shown for a preference claim
Yes
95
Is a desire to prefer presumed with an associate in a preference
Yes rebuttable
96
What does TDC stand for regarding voidable transactions
Transactions Defrauding Creditors
97
Must a TDC be a transaction at an undervalue
Yes
98
What intent must be shown for a TDC claim
Defraud creditors put assets beyond reach
99
Is there a relevant time limit for a TDC claim
No
100
Must the debtor be insolvent for a TDC claim
No
101
What is often an alternative to bankruptcy
IVA
102
Who supervises an IVA
Supervisor an insolvency practitioner
103
Who gathers and distributes assets in bankruptcy
Trustee Official Receiver or insolvency practitioner
104
When is a bankrupt automatically discharged generally
After one year
105
What can a trustee challenge to increase bankruptcy assets
TUVs TDCs preferences
