CHAPTER II - PROTECTION OF BANKRUPT'S ESTATE AND
INVESTIGATION OF HIS AFFAIRS
283. Definition of bankrupt's
estate
(1) Subject as follows, a bankrupt's estate for
the purposes of any of the Group of Parts
comprises -
(a) all property belonging to or vested
in the bankrupt at the commencement of the
bankruptcy, and
(b) any property which by virtue of any
of the following provisions of this Part is
comprised in that estate or is treated as
falling within the preceding paragraph.
(2) Subsection (1) does not apply to -
(a) such tools, books, vehicles and other
items of equipment as are necessary to the
bankrupt for use personally by him in his
employment, business or vocation ;
(b) such clothing, bedding, furniture,
household equipment and provisions as are
necessary for satisfying the basic domestic
needs of the bankrupt and his family.
This subsection is subject to section 308 in
Chapter IV (certain excluded property
reclaimable by trustee).
(3) Subsection (1) does not apply to -
(a) property held by the bankrupt on
trust for any other person, or
(b) the right of nomination to a vacant
ecclesiastical benefice.
(4) References in any of this Group of Parts
to property, in relation to a bankrupt, include
references to any power exercisable by him over
or in respect of property not for the time being
comprised in the bankrupt's estate and -
(a) is so exercisable at a time after
either the official receiver has had his
release in respect of that estate under
section 299(2) in Chapter III or a meeting
summoned by the trustee of that estate under
section 331 in Chapter IV has been held, or
(b) cannot be so exercised for the
benefit of the bankrupt ;
and a power exercisable over or in respect of
property is deemed for the purposes of any of
this Group of Parts to vest in the person
entitled to exercise it at the time of the
transaction or event by virtue of which it is
exercisable by that person (whether or not it
becomes so exercisable at that time).
(5) For the purposes of any such provision in
this Group of Parts, property comprised in a
bankrupt's estate is so comprised subject to the
rights of any person other than the bankrupt
(whether as a secured creditor of the bankrupt
or otherwise) in relation thereto, but
disregarding -
(a) any rights in relation to which a
statement such as is required by section
269(a) was made in the petition on which the
bankrupt was adjudged bankrupt, and
(b) any rights which have been otherwise
given up in accordance with the rules.
(6) This section has effect subject to the
provisions of any enactment not contained in
this Act under which any property is to be
excluded from a bankrupt's estate.
284. Restrictions on dispositions
of property
(1) Where a person is adjudged bankrupt, any
disposition of property made by that person in
the period to which this section applies is void
except to the extent that it is or was made with
the consent of the court, or it or was
subsequently ratified by the court.
(2) Subsection (1) applies to a payment
(whether in cash or otherwise) as it applies to
a disposition of property and, accordingly,
where any payment is void by virtue of that
subsection, the person paid shall hold the sum
paid for the bankruptcy as part of his estate.
(3) This section applies to the period
beginning with the day of the presentation of
the petition for the bankruptcy order and ending
with the vesting, under Chapter IV of this Part,
of the bankrupt's estate in a trustee.
(4) The preceding provisions of this section
do not give a remedy against any person -
(a) in respect of any property or payment
which he received before the commencement of
the bankruptcy in good faith, for value and
without notice that the petition had been
presented, or
(b) in respect of any interest in
property which derives from an interest in
respect of which there is, by virtue of this
subsection, has no remedy.
(5) Where after the commencement of his
bankruptcy the bankrupt has incurred a debt to
banker or other person by reason of the making
of a payment which is void under this section,
that debt is deemed for the purposes of any of
this Group of Parts to have been incurred before
the commencement of the bankruptcy unless -
(a) that banker or person had notice of
the bankruptcy before the debt was incurred,
or
(b) it is not reasonably practicable for
the amount of the payment to be recovered
from the person to whom it was made.
(6) A disposition of property is void under
this section not- withstanding that the
property, is not or, as the case may be, would
not be comprised in the bankrupt's estate ; but
nothing in this section affects any disposition
made by a person of property held by him on
trust for any other person.
285. Restriction on proceedings and
remedies
(1) At any time when proceedings on a bankrupt
petition are pending or an individual has been
adjudged bankrupt the court may stay any action,
execution or other legal process against the
property or person of the debtor or, as the case
may be, of the bankrupt.
(2) Any court in which proceedings are
pending against any individual may, on proof
that a bankruptcy petition has been presented in
respect of that individual or that he is an
undischarged bankrupt, either stay the
proceedings or allow them to continue on such
terms as it thinks fit.
(3) After the making of a bankruptcy order no
person who is a creditor of the bankrupt in
respect of a debt provable in the bankruptcy
shall -
(a) have any remedy against the property
or person of the bankrupt in respect of that
debt, or
(b) before the discharge of the bankrupt,
commence any action or other legal
proceedings against the bankrupt except with
the leave of the court and in such terms as
the court may impose.
This is subject to sections 346 (enforcement
procedures) and 347 (limited right to distress).
(4) Subject as follows, subsection (3) does
not affect the right of a secured creditor of
the bankrupt to enforce his security.
(5) Where any goods of the discharged
bankrupt are held by any person by way of
pledge, pawn or other security, the official
receiver may, after giving notice in writing of
his intention to do so, inspect the goods.
Where such a notice has been given to any
person, that person is not entitled, without
leave of the court, to realise his security
unless he has given the trustee of the
bankrupt's estate a reasonable opportunity of
inspecting the goods and of exercising the
bankrupt's right of redemption.
(6) References in this section to the
property or goods of the bankrupt are to any of
his property or goods, whether or not comprised
in his estate.
286. Power to appoint interim
receiver
(1) The court may, if it is shown to be
necessary for the protection of the debtor's
property, at any time after the presentation of
a bankrupt's petition and before making a
bankruptcy order, appoint the official receiver
to be interim receiver of the debtor's property.
(2) Where the court has, on a debtor's
petition, appointed an insolvency practitioner
under section 273 and it is shown to the court
as mentioned in subsection (1) of this section,
the court may, without making a bankruptcy
order, appoint that practitioner, instead of the
official receiver, to be interim receiver of the
debtor's property.
(3) The court may by an order appointing any
person to be an interim receiver direct that his
powers shall be limited or restricted in any
respect ; but, save as so directed, an interim
receiver has, in relation to the debtor's
property, all the rights, powers, duties and
immunities of a receiver and manager under the
next section.
(4) An order of the court appointing any
person to be an interim receiver shall require
that person to take immediate possession of the
debtor's property or, as the case may be, the
part of it to which his powers as interim
receiver are limited.
(5) Where an interim receiver has been
appointed, the debtor shall give him such
inventory of his property and such other
information, and shall attend on the interim
receiver at such times, as the latter may for
the purpose of carrying out his functions under
this section reasonably required.
(6) Where an interim receiver is appointed,
section 285(3) applies for the period between
the appointment and the making of a bankruptcy
order on the petition relating to the debtor is
dismissed, if a bankruptcy order on the
petition, or the dismissal of the petition, as
if the appointment were the making of such an
order.
(7) A person ceases to be interim receiver of
a debtor's property if the bankruptcy petition
relating to the debtor is dismissed, if a
bankruptcy order is made on the petition or if
the court by order otherwise terminates the
appointment.
(8) References in this section to the
debtor's property are to all his property,
whether or not it would be comprised in his
estate if he were adjudged bankrupt.
287. Receivership pending
appointment of trustee
(1) Between the making of a bankruptcy order and
the time of which the bankrupt's estate vests in
a trustee under Chapter IV of this part, the
official receiver is the receiver and (subject
to section 370 (special manager)) the manager of
the bankrupt's estate and is under a duty to act
as such.
(2) The function of the official receiver
while acting as receiver or manager of the
bankrupt's estate under this section is to
protect the estate ; and for this purpose -
(a) he has the same powers as if he were
a receiver or manager appointed by the High
Court, and
(b) he is entitled to sell or otherwise
dispose of any perishable goods comprised in
the estate and any other goods so comprised
the value of which is likely to diminish if
they are not disposed of.
(3) The official receiver while acting as
receiver or manager of the estate under this
section -
(a) shall take all such steps as he
thinks fit for protecting any property which
may be claimed for the estate by the trustee
of that estate,
(b) is not, except in pursuance of
directions given by the Secretary of State,
required to do anything that involves his
incurring expenditure,
(c) may, if he thinks fit (and shall, if
so directed by the court) at any time summon
a general meeting of the bankrupt's
creditors.
(4) Where -
(a) the official receiver acting as
receiver or manager of the estate under this
section seizes or disposes of any property
which is not comprised in the estate, and
(b) at the time of the seizure or
disposal of the official receiver believes,
and has reasonable grounds for believing,
that he is entitled (whether in pursuance of
an order of the court or otherwise) to seize
or dispose of that property,
the official receiver is not to be liable to
any person in respect of any loss or damage
resulting from the seizure or disposal except in
so far as that loss or damage is caused by his
negligence ; and he has a lien on the property,
or the proceeds of its sale, for such of the
expenses of the bankruptcy as were incurred in
connection with the seizure or disposal.
(5) This section does not apply where by
virtue of section 297 (appointment of trustee ;
special cases) the bankrupt's estate vests in a
trustee immediately on the making of the
bankruptcy order.
288. Statement of affairs
(1) Where a bankruptcy order has been made
otherwise than on a debtor's petition, the
bankrupt shall submit a statement of his affairs
to the official receiver before the end of the
period of 21 days beginning with the
commencement of the bankruptcy.
(2) The statement of affairs shall contain -
(a) such particulars of the bankrupt's
creditors and of his debts and other
liabilities and of his assets as nay be
prescribed, and
(b) such other information as may be
prescribed.
(3) The official receiver may, if he thinks
fit -
(a) release the bankrupt from his duty
under subsection (1), or
(b) extend the period specified in that
subsection ;
and where the official receiver has refused
to exercise a power conferred by this section,
the court, if it thinks fit, may exercise it.
(4) A bankrupt who--
(a) without reasonable excuse fails to
comply with the obligation imposed by this
section, or
(b) without reasonable excuse submits a
statement of affairs that does not comply
with the prescribed requirements,
is guilty of a contempt of court and liable
to be punished accordingly (in addition to any
other punishment to which he may be subject).
289. Investigatory duties of
official receiver
(1) Subject to subsection (5) below, it is the
duty of the official receiver to investigate the
conduct and affairs of every bankrupt and to
make such a report (if any) to the court as he
thinks fit.
(2) Where an application is made by the
bankrupt under section 280 for his discharge
from bankruptcy, it is the duty of the official
receiver to make a report to the court with
respect to the prescribed matters ; and the
court shall consider that report before
determining what order (if any) to make under
that section.
(3) A report by the official receiver under
this section shall, in any proceedings, be prima
facie evidence of the facts stated in it.
(4) In subsection (1) the reference to the
conduct and affairs of a bankrupt includes his
conduct and affairs before the making of the
order by which he was adjudged bankrupt.
(5) Where a certificate for the summary
administration of the bankrupt's estate is for
the time being in force, the official receiver
shall carry out an investigation under
subsection (1) only if he thinks fit.
290. Public examination of bankrupt
(1) Where a bankruptcy order has been made, the
official receiver may at any time before the
discharge of the bankrupt apply to the court for
the public examination of the bankrupt.
(2) Unless the court otherwise orders, the
official receiver shall make an application
under subsection (1) if notice requiring him to
do so is given to him, in accordance with the
rules, by one of the bankrupt's creditors with
the concurrence of not less than one-half, in
value, of those creditors (including the
creditor giving notice).
(3) On an application under subsection (1),
the court shall direct that a public examination
of the bankrupt shall be held on a day appointed
by the court ; and the bankrupt shall attend on
that day and be publicly examined as to his
affairs, dealings and property.
(4) The following may take part in the public
examination of the bankrupt and may question him
concerning his affairs, dealings and property
and the causes of his failure, namely -
(a) the official receiver and, in the
case of an individual adjudged bankrupt on a
petition under section 264(1)(d), the
Official Petitioner,
(b) the trustee of the bankrupt's estate,
if his appointment has taken effect,
(c) any person who has been appointed as
special manager of the bankrupt's estate or
business,
(d) any creditor of the bankrupt who has
tendered a proof in the bankruptcy.
(5) If a bankrupt without reasonable excuse
fails at any time to attend his public
examination under this section he is guilty of a
contempt of court and liable to be punished
accordingly (in addition to any other punishment
to which he may be subject).
291. Duties of bankrupt in relation
to official receiver
(1) Where a bankruptcy order has been made, the
bankrupt is under a duty -
(a) to deliver possession of his estate
to the official receiver, and
(b) to deliver up to the official
receiver all books, papers and other records
of which he has possession or control and
which relate to his estate and affairs
(including any which would be privileged
from disclosure in any proceedings).
(2) In the case of any part of the bankrupt's
estate which consists of things possession of
which cannot be delivered to the official
receiver, and in the case of any property that
may be claimed for the bankrupt's estate by the
trustee, it is the bankrupt's duty to so all
such things as may reasonably br required by the
official receiver for the protection of those
things or that property.
(3) Subsections (1) and (2) do not apply
where by virtue of the bankrupt's estate vests
in a trustee immediately on the making of the
bankruptcy order.
(4) The bankrupt shall give the official
receiver such inventory of his estate and such
other information, and shall attend on the
official receiver at such times, as the official
receiver may for any of the purposes of this
Chapter reasonably require.
(5) Subsection (4) applies to a bankrupt
after his discharge.
(6) If the bankrupt without reasonable excuse
fails to comply with any obligation imposed by
this section, he is guilty of a contempt of
court and liable to be punished accordingly (in
addition to any other punishment to which he may
be subject).
The above is the actual text of the
Insolvency Act 1986.
For more information please visit: Her
Majesty's Stationery Office.
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