Enquire Within Upon Everything Part 131

1537. Acts of Bankruptcy.

"Acts of Bankruptcy" comprise:--a.s.signment of property for benefit of creditors; fraudulent transfer of property; leaving, or remaining out of, England, or absence from dwelling-house to defeat or delay creditors; filing declaration of insolvency or presenting a bankruptcy pet.i.tion against self; levy of execution; failure to comply with a bankruptcy notice to pay a judgment debt; giving notice to creditors of suspension of payment; and having a receiving order made against one.

1538. Receiving Order.

If a debtor commit an act of bankruptcy, the Court may, on pet.i.tion either by creditor or debtor, make a receiving order for the protection of the estate. All receiving orders to be advertised in the _London Gazette_ and locally.

1539. Pet.i.tion.

A creditor (or creditors) cannot present a pet.i.tion unless the debt (or debts) amount to 50; the debt must be a liquidated sum, payable now or at some future time; the act of bankruptcy on which the pet.i.tion is grounded must have occurred within _three months_ before presentation of pet.i.tion; and the debtor must be domiciled in, or within a year before pet.i.tion have resided in or had a place of business in, England. No pet.i.tion can, after presentment, be withdrawn without leave of the Court. A creditor's pet.i.tion must be accompanied by affidavits verifying the statements therein.

1540. Official Receiver.

On a receiving order being made, the debtor's property vests in the Official Receiver, who must summon a first meeting of creditors, giving to each not less than seven days' notice of time and place in the 'Gazette' and locally.

1541. The Meeting of Creditors.

The meeting of creditors summoned as above shall consider whether a proposal for a composition or scheme of arrangement shall be entertained, or whether the debtor shall be adjudged bankrupt, and the mode of dealing with the debtor's property.

1542. Duties of Debtor.

The debtor must furnish the Official Receiver with a full statement of his affairs in the prescribed form, verified by affidavit, and all such information as the Receiver may require. This statement, if made on a _debtor's pet.i.tion_, must be submitted to the Receiver within _three days_ of the date of the receiving order; if on a _creditor's pet.i.tion_, within _seven days_; or the debtor will be liable to be adjudged bankrupt on pet.i.tion to the Court by Receiver or creditor.

[A SWALLOW MAKES NOT SUMMER OR SPRING-TIME.]

1543. Public Examination.

Before any resolution or composition is approved by creditors, a public examination of the bankrupt, on oath, must be held by the Court, at which the Receiver must be present.

1544. Composition or Scheme of Arrangement.

The creditors may at their first meeting or any adjournment thereof, by special resolution, entertain a composition or scheme of arrangement, and if the same be accepted by the creditors, application must be made to the Court to approve it, the Official Receiver reporting as to the terms of the composition or arrangement, which the Court will approve or reject according to the circ.u.mstances.

1545. Default in Payment of Instalments.

Default in payment of instalments, in composition or scheme, renders the debtor liable to be adjudged bankrupt on application by any creditor to the Court.

1546. Adjudication of Bankruptcy when a Composition is not Accepted.

If after a receiving order has been made the creditors resolve that the debtor be adjudged bankrupt, or pa.s.s no resolution, or do not meet, or if a composition or scheme is not accepted and approved within fourteen days after the debtor's public examination, the Court will adjudge the debtor bankrupt, and his property shall become divisible among his creditors, and shall vest in a Trustee. Notice of such adjudication must be advertised in the _London Gazette_ and locally.

1547. Appointment of Trustee.

The creditors of a bankrupt may, by resolution, appoint a Trustee of the debtor's property. If this has not been done prior to adjudication, the Official Receiver shall call a creditors' meeting for that purpose. The creditors may resolve to leave the appointment to the committee of inspection. The person appointed shall give security to the Board of Trade, which shall, if it sees fit, certify the appointment. If no Trustee is appointed by the creditors, the Board may appoint one.

1548. Committee of Inspection.

A committee of inspection must not exceed five, nor be less than three, in number, and must be creditors qualified to vote, or their authorised representatives.

1549. Bankrupt's Responsibilities.

The bankrupt must render every a.s.sistance to creditors in realizing his property. He must produce a clear statement of his affairs at the first meeting. He must be present for public examination on the day named by the Court and the adjournment thereof. He must also furnish a list of debts due to or from him. He must attend all meetings of creditors, and wait on the Trustee when required to answer any questions regarding his property, and to execute all doc.u.ments and to carry out anything that may be ordered by the Trustee or the Court.

1550. Trustee's Duties (1).

The trustee's duties are to manage the estate and distribute the proceeds, under regulation of the committee of inspection, or of resolutions arrived at by the creditors at any general meeting. He has to call meetings of committee and creditors when necessary. He can transfer or dispose of the bankrupt's property for the benefit of the creditors as the bankrupt could have done himself prior to his bankruptcy. He can also carry on the bankrupt's business if necessary, compromise or arrange with creditors, and sell bankrupt's property by public auction or private contract.

1551. Trustee's Duties (2).

The trustee must render accounts to the Board of Trade not less than twice a year; and must pay all money received into the Bankruptcy Estates Account, kept by the Board of Trade at the Bank of England, and not, in any circ.u.mstances, into his private banking account.

1552. Priority Debts.

Certain debts have priority, and must be paid in full, or as far as a.s.sets will admit. These are--parochial and local rates, due at date of receiving order, or within a year before; a.s.sessed land, property, and income tax, up to April 5th next before date of order, not exceeding one year's a.s.sessment; wages and salaries of clerks, servants, labourers, or workmen, not exceeding 50, due for four months' service.

[WHAT IS DONE WELL ENOUGH, IS DONE QUICKLY ENOUGH.]

1553. Distraint with Bankruptcy.

Landlord may distrain for rent either before or after bankruptcy, but only for one year's rent if _after_ bankruptcy. Any balance beyond one year's rent must be proved as in case of an ordinary debt.

1554. Allowance for Maintenance.

Allowance for maintenance may be made to bankrupt by the Trustee with consent of committee of inspection, for his support, or for services in winding up the estate. Where the bankrupt is a beneficed clergyman, the Trustee may apply for sequestration of profits, and, with concurrence of the bishop, allow a sum equal to a curate's stipend for bankrupt's services in the parish. In the case of officers and civil servants, in receipt of salary, the Court directs what part of bankrupt's income shall be reserved for benefit of creditors.

1555. Declaration of Final Dividend.

A final dividend may be declared when the Trustee and committee of inspection consider that as much of the estate has been realised as can be done fairly without needlessly protracting the bankruptcy.