Law

Insolvency Act 1986

United Kingdom · statute

Ask the law about thisMore laws of United KingdomFor machines: Markdown

Open at the publisher →

In force since 2026-10-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

sha256 b7463150a79e9237c50608c92573d1dd32e9bb150abd4300b0fd7403f7a8298b

Contents: 666 provisions
  1. Title and introductory text
  2. A1 Overview
  3. A2 Eligible companies
  4. A3 Obtaining a moratorium by filing or lodging documents at court
  5. A4 Obtaining a moratorium for company subject to winding-up petition
  6. A5 Obtaining a moratorium for other overseas companies
  7. A6 The relevant documents
  8. A7 Beginning of moratorium and appointment of monitor
  9. A8 Obligations to notify where moratorium comes into force
  10. A9 End of the moratorium
  11. A10 Extension by directors without creditor consent
  12. A11 Extension by directors with creditor consent
  13. A12 Creditor consent for the purposes of section A11
  14. A13 Extension by court on application of directors
  15. A14 Extension while proposal for CVA pending
  16. A15 Extension by court in the course of other proceedings
  17. A16 Company enters into insolvency procedure etc
  18. A17 Obligations to notify change in end of moratorium
  19. A18 Overview and construction of references to payment holidays
  20. A19 Publicity about moratorium
  21. A20 Restrictions on insolvency proceedings etc
  22. A21 Restrictions on enforcement and legal proceedings
  23. A22 Floating charges
  24. A23 Enforcement of security granted during moratorium
  25. A24 Duty of directors to notify monitor of insolvency proceedings etc
  26. A25 Restrictions on obtaining credit
  27. A26 Restrictions on grant of security etc
  28. A27 Prohibition on entering into market contracts etc
  29. A28 Restrictions on payment of certain pre-moratorium debts
  30. A29 Restrictions on disposal of property
  31. A30 Restrictions on disposal of hire-purchase property
  32. A31 Disposal of charged property free from charge
  33. A32 Disposal of hire-purchase property
  34. A33 Contravention of certain requirements imposed under this Chapter
  35. A34 Status of monitor
  36. A35 Monitoring
  37. A36 Provision of information to monitor
  38. A37 Application by monitor for directions
  39. A38 Termination of moratorium by monitor
  40. A39 Replacement of monitor or appointment of additional monitor
  41. A40 Application of Part where two or more persons act as monitor
  42. A41 Presumption of validity
  43. A42 Challenge to monitor’s actions
  44. A43 Challenges to monitor remuneration in insolvency proceedings
  45. A44 Challenge to directors’ actions
  46. A45 Challenge brought by Board of the Pension Protection Fund
  47. A46 Offence of fraud etc during or in anticipation of moratorium
  48. A47 Offence of false representation etc to obtain a moratorium
  49. A48 Prosecution of delinquent officers of company
  50. A49 Regulated companies: modifications to this Part
  51. A50 Power to modify this Part etc in relation to certain companies
  52. A51 Power to make provision in connection with pension schemes
  53. A52 Void provisions in floating charge documents
  54. A53 Meaning of “pre-moratorium debt” and “moratorium debt”
  55. A54 Interpretation of this Part: general
  56. A55 Regulations
  57. 1 Those who may propose an arrangement.
  58. 1A Moratorium.
  59. 2 Procedure where nominee is not the liquidator or administrator.
  60. 3 Consideration of proposal.
  61. 4 Decisions of the company and its creditors.
  62. 4A Approval of arrangement.
  63. 5 Effect of approval.
  64. 6 Challenge of decisions.
  65. 6A False representations, etc.
  66. 7 Implementation of proposal.
  67. 7A Prosecution of delinquent officers of company.
  68. 7B Arrangements coming to an end prematurely.
  69. 8 Administration
  70. 9 Application for order.
  71. 10 Effect of application.
  72. 11 Effect of order.
  73. 12 Notification of order.
  74. 13 Appointment of administrator.
  75. 14 General powers.
  76. 15 Power to deal with charged property, etc.
  77. 16 Operation of s. 15 in Scotland.
  78. 17 General duties.
  79. 18 Discharge or variation of administration order.
  80. 19 Vacation of office.
  81. 20 Release of administrator.
  82. 21 Information to be given by administrator.
  83. 22 Statement of affairs to be submitted to administrator.
  84. 23 Statement of proposals.
  85. 24 Consideration of proposals by creditors’ meeting.
  86. 25 Approval of substantial revisions.
  87. 26 Creditors’ committee.
  88. 27 Protection of interests of creditors and members.
  89. 28 Extent of this Chapter.
  90. 29 Definitions.
  91. 30 Disqualification of body corporate from acting as receiver.
  92. 31 Disqualification of bankrupt or person in respect of whom a debt relief order is made
  93. 32 Power for court to appoint official receiver.
  94. 33 Time from which appointment is effective.
  95. 34 Liability for invalid appointment.
  96. 35 Application to court for directions.
  97. 36 Court’s power to fix remuneration.
  98. 37 Liability for contracts, etc.
  99. 38 Receivership accounts to be delivered to registrar.
  100. 39 Notification that receiver or manager appointed.
  101. 40 Payment of debts out of assets subject to floating charge.
  102. 41 Enforcement of duty to make returns.
  103. 42 General powers.
  104. 43 Power to dispose of charged property, etc.
  105. 44 Agency and liability for contracts.
  106. 45 Vacation of office.
  107. 46 Information to be given by administrative receiver.
  108. 47 Statement of affairs to be submitted.
  109. 48 Report by administrative receiver.
  110. 49 Committee of creditors.
  111. 50 Extent of this Chapter.
  112. 51 Power to appoint receiver.
  113. 52 Circumstances justifying appointment.
  114. 53 Mode of appointment by holder of charge.
  115. 54 Appointment by court.
  116. 55 Powers of receiver.
  117. 56 Precedence among receivers.
  118. 57 Agency and liability of receiver for contracts.
  119. 58 Remuneration of receiver.
  120. 59 Priority of debts.
  121. 60 Distribution of moneys.
  122. 61 Disposal of interest in property.
  123. 62 Cessation of appointment of receiver.
  124. 63 Powers of court.
  125. 64 Notification that receiver appointed.
  126. 65 Information to be given by receiver.
  127. 66 Company’s statement of affairs.
  128. 67 Report by receiver.
  129. 68 Committee of creditors
  130. 69 Enforcement of receiver’s duty to make returns, etc.
  131. 70 Interpretation for Chapter II.
  132. 71 Prescription of forms, etc.; regulations.
  133. 72 Cross-border operation of receivership provisions.
  134. 72A Floating charge holder not to appoint administrative receiver
  135. 72B First exception: capital market
  136. 72C Second exception: public-private partnership
  137. 72D Third exception: utilities
  138. 72DA Exception in respect of urban regeneration projects
  139. 72E Fourth exception: project finance
  140. 72F Fifth exception: financial market
  141. 72G Sixth exception: social landlords
  142. 72GA Exception in relation to protected railway companies etc.
  143. 72H Sections 72A to 72G: supplementary
  144. 73 Scheme of this Part
  145. 74 Liability as contributories of present and past members.
  146. 75 Directors, etc. with unlimited liability.
  147. 76 Liability of past directors and shareholders.
  148. 77 Limited company formerly unlimited.
  149. 78 Unlimited company formerly limited.
  150. 79 Meaning of “contributory”.
  151. 80 Nature of contributory’s liability.
  152. 81 Contributories in case of death of a member.
  153. 82 Effect of contributory’s bankruptcy.
  154. 83 Companies registered but not formed under the Companies Act 2006
  155. 84 Circumstances in which company may be wound up voluntarily.
  156. 85 Notice of resolution to wind up.
  157. 86 Commencement of winding up.
  158. 87
  159. 88 Avoidance of share transfers, etc. after winding-up resolution.
  160. 89 Statutory declaration of solvency.
  161. 90 Distinction between “members’” and “creditors’” voluntary winding up.
  162. 91 Appointment of liquidator.
  163. 92 Power to fill vacancy in office of liquidator.
  164. 92A Progress report to company ...
  165. 93 General company meeting at each year’s end (Scotland)
  166. 94 Final account prior to dissolution
  167. 95 Effect of company’s insolvency.
  168. 96 Conversion to creditors’ voluntary winding up.
  169. 97 Application of this Chapter.
  170. 98 Meeting of creditors.
  171. 99 Directors to lay statement of affairs before creditors.
  172. 100 Appointment of liquidator.
  173. 101 Appointment of liquidation committee.
  174. 102 Creditors’ meeting where winding up converted under s. 96.
  175. 103 Cesser of directors’ powers.
  176. 104 Vacancy in office of liquidator.
  177. 104A Progress report to company and creditors ... ...
  178. 105 Meetings of company and creditors at each year’s end (Scotland).
  179. 106 Final account prior to dissolution.
  180. 107 Distribution of company’s property.
  181. 108 Appointment or removal of liquidator by the court.
  182. 109 Notice by liquidator of his appointment.
  183. 110 Acceptance of shares, etc., as consideration for sale of company property.
  184. 111 Dissent from arrangement under s. 110.
  185. 112 Reference of questions to court.
  186. 113 Court’s power to control proceedings (Scotland).
  187. 114 No liquidator appointed or nominated by company.
  188. 115 Expenses of voluntary winding up.
  189. 116 Saving for certain rights.
  190. 117 High Court and county court jurisdiction.
  191. 118 Proceedings taken in wrong court.
  192. 119 Proceedings in county court; case stated for High Court.
  193. 120 Court of Session and sheriff court jurisdiction.
  194. 121 Power to remit winding up to Lord Ordinary.
  195. 122 Circumstances in which company may be wound up by the court.
  196. 123 Definition of inability to pay debts.
  197. 124 Application for winding up.
  198. 124A Petition for winding up on grounds of public interest.
  199. 124B Petition for winding up of SE
  200. 124C Petition for winding up of SCE
  201. 125 Powers of court on hearing of petition.
  202. 126 Power to stay or restrain proceedings against company.
  203. 127 Avoidance of property dispositions, etc.
  204. 128 Avoidance of attachments, etc.
  205. 129 Commencement of winding up by the court.
  206. 130 Consequences of winding-up order.
  207. 131 Company’s statement of affairs.
  208. 132 Investigation by official receiver.
  209. 133 Public examination of officers
  210. 134 Enforcement of s. 133.
  211. 135 Appointment and powers of provisional liquidator.
  212. 136 Functions of official receiver in relation to office of liquidator.
  213. 137 Appointment by Secretary of State.
  214. 138 Appointment of liquidator in Scotland.
  215. 139 Choice of liquidator by creditors and contributories.
  216. 140 Appointment by the court following administration or voluntary arrangement.
  217. 141 Liquidation committee (England and Wales).
  218. 142 Liquidation committee (Scotland).
  219. 143 General functions in winding up by the court.
  220. 144 Custody of company’s property.
  221. 145 Vesting of company property in liquidator.
  222. 146 Final account
  223. 146A Official receiver’s duty to send statement to registrar about other proceedings
  224. 147 Power to stay or sist winding up.
  225. 148 Settlement of list of contributories and application of assets.
  226. 149 Debts due from contributory to company.
  227. 150 Power to make calls.
  228. 151 Payment into bank of money due to company.
  229. 152 Order on contributory to be conclusive evidence.
  230. 153 Power to exclude creditors not proving in time.
  231. 154 Adjustment of rights of contributories.
  232. 155 Inspection of books by creditors, etc.
  233. 156 Payment of expenses of winding up.
  234. 157 Attendance at company meetings (Scotland).
  235. 158 Power to arrest absconding contributory.
  236. 159 Powers of court to be cumulative.
  237. 160 Delegation of powers to liquidator (England and Wales).
  238. 161 Orders for calls on contributories (Scotland).
  239. 162 Appeals from orders in Scotland.
  240. 163 Style and title of liquidators.
  241. 164 Corrupt inducement affecting appointment.
  242. 165 Voluntary winding up.
  243. 166 Creditors’ voluntary winding up.
  244. 167 Winding up by the court.
  245. 168 Supplementary powers (England and Wales).
  246. 169 Supplementary powers (Scotland).
  247. 170 Enforcement of liquidator’s duty to make returns, etc.
  248. 171 Removal, etc. (voluntary winding up).
  249. 172 Removal, etc. (winding up by the court).
  250. 173 Release (voluntary winding up).
  251. 174 Release (winding up by the court).
  252. 174A Moratorium debts etc: priority
  253. 175 Preferential debts (general provision).
  254. 176 Preferential charge on goods distrained , etc.
  255. 176AZA Non-preferential debts of financial institutions
  256. 176ZA Payment of expenses of winding up (England and Wales)
  257. 176ZB Application of proceeds of office-holder claims
  258. 176A Share of assets for unsecured creditors
  259. 177 Power to appoint special manager.
  260. 178 Power to disclaim onerous property.
  261. 179 Disclaimer of leaseholds.
  262. 180 Land subject to rentcharge.
  263. 181 Powers of court (general).
  264. 182 Powers of court (leaseholds).
  265. 183 Effect of execution or attachment (England and Wales).
  266. 184 Duties of officers charged with execution of writs and other processes (England and Wales).
  267. 185 Effect of diligence (Scotland)
  268. 186 Rescission of contracts by the court.
  269. 187 Power to make over assets to employees.
  270. 188 Notification that company is in liquidation.
  271. 189 Interest on debts.
  272. 190 Documents exempt from stamp duty.
  273. 191 Company’s books to be evidence.
  274. 192 Information as to pending liquidations.
  275. 193 Unclaimed dividends (Scotland).
  276. 194 Resolutions passed at adjourned meetings.
  277. 195 Court's powers to ascertain wishes of creditors or contributories.
  278. 196 Judicial notice of court documents.
  279. 197 Commission for receiving evidence.
  280. 198 Court order for examination of persons in Scotland.
  281. 199 Costs of application for leave to proceed (Scottish companies).
  282. 200 Affidavits etc. in United Kingdom and overseas.
  283. 201 Dissolution (voluntary winding up).
  284. 202 Early dissolution (England and Wales).
  285. 203 Consequence of notice under s. 202.
  286. 204 Early dissolution (Scotland).
  287. 205 Dissolution otherwise than under ss. 202-204.
  288. 206 Fraud, etc. in anticipation of winding up.
  289. 207 Transactions in fraud of creditors.
  290. 208 Misconduct in course of winding up.
  291. 209 Falsification of company’s books.
  292. 210 Material omissions from statement relating to company’s affairs.
  293. 211 False representations to creditors.
  294. 212 Summary remedy against delinquent directors, liquidators, etc.
  295. 213 Fraudulent trading.
  296. 214 Wrongful trading.
  297. 215 Proceedings under ss. 213, 214.
  298. 216 Restriction on re-use of company names.
  299. 217 Personal liability for debts, following contravention of s. 216.
  300. 218 Prosecution of delinquent officers and members of company.
  301. 219 Obligations arising under s. 218.
  302. 220 Meaning of “unregistered company”.
  303. 221 Winding up of unregistered companies.
  304. 222 Inability to pay debts: unpaid creditor for £750 or more.
  305. 223 Inability to pay debts: debt remaining unsatisfed after action brought.
  306. 224 Inability to pay debts: other cases.
  307. 225 Company incorporated outside Great Britain may be wound up though dissolved.
  308. 226 Contributories in winding up of unregistered company.
  309. 227 Power of court to stay, sist or restrain proceedings.
  310. 228 Actions stayed on winding-up order.
  311. 229 Provisions of this Part to be cumulative.
  312. 230 Holders of office to be qualified insolvency practitioners.
  313. 231 Appointment to office of two or more persons.
  314. 232 Validity of office-holder’s acts.
  315. 233 Supplies of gas, water, electricity, etc.
  316. 233A Further protection of essential supplies
  317. 233B Protection of supplies of goods and services
  318. 233C Powers to amend section 233B and Schedule 4ZZA
  319. 234 Getting in the company’s property.
  320. 235 Duty to co-operate with office-holder.
  321. 236 Inquiry into company’s dealings, etc.
  322. 237 Court’s enforcement powers under s. 236.
  323. 238 Transactions at an undervalue (England and Wales).
  324. 239 Preferences (England and Wales).
  325. 240 “Relevant time” under ss. 238, 239.
  326. 241 Orders under ss. 238, 239.
  327. 242 Gratuitous alienations (Scotland).
  328. 243 Unfair preferences (Scotland).
  329. 244 Extortionate credit transactions.
  330. 245 Avoidance of certain floating charges.
  331. 246 Unenforceability of liens on books, etc.
  332. 246ZA Fraudulent trading: administration
  333. 246ZB Wrongful trading: administration
  334. 246ZC Proceedings under section 246ZA or 246ZB
  335. 246ZD Power to assign
  336. 246ZE Decisions by creditors and contributories: general
  337. 246ZF Deemed consent procedure
  338. 246ZG Power to amend sections 246ZE and 246ZF
  339. 246A Remote attendance at meetings
  340. 246B Use of websites
  341. 246C Creditors' ability to opt out of receiving certain notices
  342. 247 “Insolvency” and “go into liquidation”.
  343. 248 “Secured creditor”, etc.
  344. 248A “Opted-out creditor”
  345. 249 “Connected” with a company.
  346. 250 “Member” of a company.
  347. 251 Expressions used generally.
  348. 251A Debt relief orders
  349. 251B Making of application
  350. 251C Duty of official receiver to consider and determine application
  351. 251D Presumptions applicable to the determination of an application
  352. 251E Making of debt relief orders
  353. 251F Effect of debt relief order on other debt management arrangements
  354. 251G Moratorium from qualifying debts
  355. 251H The moratorium period
  356. 251I Discharge from qualifying debts
  357. 251J Providing assistance to official receiver etc
  358. 251K Objections and investigations
  359. 251L Power of official receiver to revoke or amend a debt relief order
  360. 251M Powers of court in relation to debt relief orders
  361. 251N Inquiry into debtor's dealings and property
  362. 251O False representations and omissions
  363. 251P Concealment or falsification of documents
  364. 251Q Fraudulent disposal of property
  365. 251R Fraudulent dealing with property obtained on credit
  366. 251S Obtaining credit or engaging in business
  367. 251T Offences: supplementary
  368. 251U Approved intermediaries
  369. 251V Debt relief restrictions orders and undertakings
  370. 251W Register of debt relief orders etc
  371. 251X Interpretation
  372. 252 Interim order of court.
  373. 253 Application for interim order.
  374. 254 Effect of application.
  375. 255 Cases in which interim order can be made.
  376. 256 Nominee’s report on debtor’s proposal.
  377. 256A Debtor’s proposal and nominee’s report.
  378. 257 Consideration of debtor's proposal by creditors
  379. 258 Approval of debtor's proposal
  380. 259 Report of decisions to court.
  381. 260 Effect of approval.
  382. 261 Additional effect on undischarged bankrupt
  383. 262 Challenge of creditors' decision.
  384. 262A False representations etc.
  385. 262B Prosecution of delinquent debtors.
  386. 262C Arrangements coming to an end prematurely.
  387. 263 Implementation and supervision of approved voluntary arrangement.
  388. 263A Availability
  389. 263B Decision
  390. 263C Result
  391. 263D Approval of voluntary arrangement
  392. 263E Implementation
  393. 263F Revocation
  394. 263G Offences
  395. 263H Bankruptcy applications to an adjudicator
  396. 263I Debtors against whom an adjudicator may make a bankruptcy order
  397. 263J Conditions applying to bankruptcy application
  398. 263K Determination of bankruptcy application
  399. 263L Adjudicator's requests for further information
  400. 263M Making of bankruptcy order
  401. 263N Refusal to make a bankruptcy order: review and appeal etc.
  402. 263O False representations and omissions
  403. 264 Who may present a bankruptcy petition.
  404. 265 Creditor's petition: debtors against whom the court may make a bankruptcy order.
  405. 266 Other preliminary conditions.
  406. 267 Grounds of creditor’s petition.
  407. 268 Definition of “inability to pay”, etc.; the statutory demand.
  408. 269 Creditor with security.
  409. 270 Expedited petition.
  410. 271 Proceedings on creditor’s petition.
  411. 272 Grounds of debtor’s petition.
  412. 273 Appointment of insolvency practitioner by the court.
  413. 274 Action on report of insolvency practitioner.
  414. 274A Debtor who meets conditions for a debt relief order
  415. 275 Summary administration.
  416. 276 Default in connection with voluntary arrangement.
  417. 277 Petition based on criminal bankruptcy order.
  418. 278 Commencement and continuance.
  419. 279 Duration
  420. 280 Discharge by order of the court.
  421. 281 Effect of discharge.
  422. 281A Post-discharge restrictions
  423. 282 Court’s power to annul bankruptcy order.
  424. 283 Definition of bankrupt’s estate.
  425. 283A Bankrupt’s home ceasing to form part of estate
  426. 284 Restrictions on dispositions of property.
  427. 285 Restriction on proceedings and remedies.
  428. 286 Power to appoint interim receiver.
  429. 287 Powers of interim receiver.
  430. 288 Statement of affairs.
  431. 289 Investigatory duties of official receiver
  432. 290 Public examination of bankrupt.
  433. 291 Duties of bankrupt in relation to official receiver.
  434. 291A First trustee in bankruptcy
  435. 292 Appointment of trustees: general provision
  436. 293 Summoning of meeting to appoint first trustee.
  437. 294 Power of creditors to requisition meeting.
  438. 295 Failure of meeting to appoint trustee.
  439. 296 Appointment of trustee by Secretary of State.
  440. 297 Special cases.
  441. 298 Removal of trustee; vacation of office.
  442. 299 Release of trustee.
  443. 300 Vacancy in office as trustee.
  444. 301 Creditors’ committee.
  445. 302 Exercise by Secretary of State of functions of creditors’ committee.
  446. 303 General control of trustee by the court.
  447. 304 Liability of trustee.
  448. 305 General functions of trustee.
  449. 306 Vesting of bankrupt’s estate in trustee.
  450. 306A Property subject to restraint order
  451. 306AA Property released from detention
  452. 306B Property in respect of which receivership or administration order made
  453. 306BA Property in respect of which realisation order made
  454. 306C Property subject to certain orders where confiscation order discharged or quashed
  455. 307 After-acquired property.
  456. 308 Vesting in trustee of certain items of excess value.
  457. 308A Vesting in trustee of certain tenancies.
  458. 309 Time-limit for notice under s. 307 or 308.
  459. 310 Income payments orders.
  460. 310A Income payments agreement
  461. 311 Acquisition by trustee of control.
  462. 312 Obligation to surrender control to trustee.
  463. 313 Charge on bankrupt’s home.
  464. 313A Low value home: application for sale, possession or charge
  465. 314 Powers of trustee.
  466. 315 Disclaimer (general power).
  467. 316 Notice requiring trustee’s decision.
  468. 317 Disclaimer of leaseholds.
  469. 318 Disclaimer of dwelling house.
  470. 319 Disclaimer of land subject to rentcharge.
  471. 320 Court order vesting disclaimed property.
  472. 321 Order under s. 320 in respect of leaseholds.
  473. 322 Proof of debts.
  474. 323 Mutual credit and set-off.
  475. 324 Distribution by means of dividend.
  476. 325 Claims by unsatisfied creditors.
  477. 326 Distribution of property in specie.
  478. 327 Distribution in criminal bankruptcy.
  479. 328 Priority of debts.
  480. 329 Debts to spouse.
  481. 330 Final distribution.
  482. 331 Final report.
  483. 332 Saving for bankrupt’s home.
  484. 333 Duties of bankrupt in relation to trustee.
  485. 334 Stay of distribution in case of second bankruptcy.
  486. 335 Adjustment between earlier and later bankruptcy estates.
  487. 335A Rights under trusts of land.
  488. 336 Rights of occupation etc. of bankrupt’s spouse or civil partner.
  489. 337 Rights of occupation of bankrupt.
  490. 338 Payments in respect of premises occupied by bankrupt.
  491. 339 Transactions at an undervalue.
  492. 340 Preferences.
  493. 341 “Relevant time” under ss. 339, 340.
  494. 342 Orders under ss. 339, 340.
  495. 342A Recovery of excessive pension contributions.
  496. 342B Orders under section 342A.
  497. 342C Orders under section 342A: supplementary.
  498. 342D Recovery of excessive contributions in pension-sharing cases.
  499. 342E Orders under section 339 or 340 in respect of pension-sharing transactions.
  500. 342F Orders under section 339 or 340 in pension-sharing cases: supplementary.
  501. 343 Extortionate credit transactions.
  502. 344 Avoidance of general assignment of book debts.
  503. 345 Contracts to which bankrupt is a party.
  504. 346 Enforcement procedures.
  505. 347 Distress, etc.
  506. 348 Apprenticeships, etc.
  507. 349 Unenforceability of liens on books, etc.
  508. 349A Arbitration agreements to which bankrupt is party.
  509. 350 Scheme of this Chapter.
  510. 351 Definitions.
  511. 352 Defence of innocent intention.
  512. 353 Non-disclosure.
  513. 354 Concealment of property.
  514. 355 Concealment of books and papers; falsification.
  515. 356 False statements.
  516. 357 Fraudulent disposal of property.
  517. 358 Absconding.
  518. 359 Fraudulent dealing with property obtained on credit.
  519. 360 Obtaining credit; engaging in business.
  520. 361 Failure to keep proper accounts of business.
  521. 362 Gambling.
  522. 363 General control of court.
  523. 364 Power of arrest.
  524. 365 Seizure of bankrupt’s property.
  525. 366 Inquiry into bankrupt’s dealings and property.
  526. 367 Court’s enforcement powers under s. 366.
  527. 368 Provision corresponding to s. 366, where interim receiver appointed.
  528. 369 Order for production of documents by inland revenue.
  529. 370 Power to appoint special manager.
  530. 371 Re-direction of bankrupt’s letters, etc.
  531. 372 Supplies of gas, water, electricity, etc.
  532. 372A Further protection of essential supplies
  533. 373 Jurisdiction in relation to insolvent individuals.
  534. 374 Insolvency districts.
  535. 375 Appeals etc. from courts exercising insolvency jurisdiction.
  536. 376 Time-limits.
  537. 377 Formal defects.
  538. 378 Exemption from stamp duty.
  539. 379 Annual report.
  540. 379ZA Creditors' decisions: general
  541. 379ZB Deemed consent procedure
  542. 379ZC Power to amend sections 379ZA and 379ZB
  543. 379A Remote attendance at meetings
  544. 379B Use of websites
  545. 379C Creditors' ability to opt out of receiving certain notices
  546. 380 Introductory.
  547. 381 “Bankrupt” and associated terminology.
  548. 382 “Bankruptcy debt” , “liability”
  549. 383 “Creditor”, “security”, etc.
  550. 383A “Opted-out creditor”
  551. 384 “Prescribed” and “the rules”.
  552. 385 Miscellaneous definitions.
  553. 386 Categories of preferential debts.
  554. 387 “The relevant date”.
  555. 387A Financial institutions and their non-preferential debts
  556. 388 Meaning of “act as insolvency practitioner”
  557. 389 Acting without qualification an offence.
  558. 389A Authorisation of nominees and supervisors.
  559. 389B Official receiver as nominee or supervisor
  560. 390 Persons not qualified to act as insolvency practitioners.
  561. 390A Authorisation
  562. 390B Partial authorisation: acting in relation to partnerships
  563. 391 Recognised professional bodies
  564. 391A Application for recognition as recognised professional body
  565. 391B Application of regulatory objectives
  566. 391C Meaning of “regulatory functions” and “regulatory objectives”
  567. 391D Directions
  568. 391E Directions: procedure
  569. 391F Financial penalty
  570. 391G Financial penalty: procedure
  571. 391H Appeal against financial penalty
  572. 391I Recovery of financial penalties
  573. 391J Reprimand
  574. 391K Reprimand: procedure
  575. 391L Revocation of recognition at instigation of Secretary of State
  576. 391M Orders under section 391L: procedure
  577. 391N Revocation of recognition at request of body
  578. 391O Direct sanctions orders
  579. 391P Application for, and power to make, direct sanctions order
  580. 391Q Direct sanctions order: conditions
  581. 391R Direct sanctions direction instead of order
  582. 391S Power for Secretary of State to obtain information
  583. 391T Compliance orders
  584. 398A Appointment etc of adjudicators and assistants
  585. 399 Appointment, etc. of official receivers.
  586. 400 Functions and status of official receivers.
  587. 401 Deputy official receivers and staff.
  588. 402 Official Petitioner.
  589. 403 Insolvency Services Account.
  590. 404 Investment Account.
  591. 405 Application of income in Investment Account; adjustment of balances.
  592. 406 Interest on money received by liquidators or trustees in bankruptcy and invested.
  593. 407 Unclaimed dividends and undistributed balances.
  594. 408 Adjustment of balances
  595. 409 Annual financial statement and audit.
  596. 410 Extent of this Part.
  597. 411 Company insolvency rules.
  598. 412 Individual insolvency rules (England and Wales).
  599. 413 Insolvency Rules Committee.
  600. 414 Fees orders (company insolvency proceedings).
  601. 415 Fees orders (individual insolvency proceedings in England and Wales).
  602. 415A Fees orders (general)
  603. 415B Monetary limits (company moratorium)
  604. 416 Monetary limits (companies winding up).
  605. 417 Money sum in s. 222.
  606. 417A Money sums (company moratorium).
  607. 418 Monetary limits (bankruptcy).
  608. 419 Regulations for purposes of Part XIII.
  609. 420 Insolvent partnerships.
  610. 421 Insolvent estates of deceased persons.
  611. 421A Insolvent estates: joint tenancies.
  612. 422 Formerly authorised banks.
  613. 422A Meaning of “relevant offence”
  614. 423 Transactions defrauding creditors.
  615. 424 Those who may apply for an order under s. 423.
  616. 425 Provision which may be made by order under s. 423.
  617. 426 Co-operation between courts exercising jurisdiction in relation to insolvency.
  618. 426A Disqualification from Parliament (England and Wales and Northern Ireland)
  619. 426B Devolution
  620. 426C Irrelevance of privilege
  621. 427 Disqualification from Parliament (Scotland ...)
  622. 428 Exemptions from Restrictive Trade Practices Act.
  623. 429 Disabilities on revocation of administration order against an individual.
  624. 430 Provision introducing Schedule of punishments.
  625. 431 Summary proceedings.
  626. 432 Offences by bodies corporate.
  627. 433 Admissibility in evidence of statements of affairs, etc.
  628. 434 Crown application.
  629. 434A Introductory
  630. 434B Representation of corporations in decision procedures and at meetings
  631. 434C Legal professional privilege
  632. 434D Enforcement of company's filing obligations
  633. 434E Application of filing obligations to overseas companies
  634. 435 Meaning of “associate”.
  635. 436 Expressions used generally.
  636. 436A Proceedings under EU Regulations: modified definition of property
  637. 436B References to things in writing
  638. 437 Transitional provisions, and savings.
  639. 438 Repeals.
  640. 439 Amendment of enactments.
  641. 440 Extent (Scotland).
  642. 441 Extent (Northern Ireland).
  643. 442 Extent (other territories).
  644. 443 Commencement.
  645. 444 Citation.
  646. SCHEDULE ZA1 Moratorium: Eligible companies
  647. SCHEDULE ZA2 Moratorium: contract or other instrument involving financial services
  648. SCHEDULE B1 ADMINISTRATION
  649. SCHEDULE 1 Powers of Administrator or Administrative Receiver
  650. SCHEDULE 2 Powers of a Scottish Receiver (Additional to Those Conferred on him by the Instrument of Charge)
  651. SCHEDULE 2A EXCEPTIONS TO PROHIBITION ON APPOINTMENT OF ADMINISTRATIVE RECEIVER: SUPPLEMENTARY PROVISIONS
  652. SCHEDULE 3 Orders in Course of Winding Up Pronounced in Vacation (Scotland)
  653. SCHEDULE 4 Powers of Liquidator in a Winding Up
  654. SCHEDULE 4ZZA Protection of supplies under section 233B: exclusions
  655. SCHEDULE 4ZA Conditions for making a debt relief order
  656. SCHEDULE 4ZB Debt relief restrictions orders and undertakings
  657. SCHEDULE 4A
  658. SCHEDULE 5 Powers of Trustee in Bankruptcy
  659. SCHEDULE 6 The Categories of Preferential Debts
  660. SCHEDULE 8 Provisions Capable of Inclusion in Company Insolvency Rules
  661. SCHEDULE 9 Provisions Capable of Inclusion in Individual Insolvency Rules
  662. SCHEDULE 10 Punishment of Offences under this Act
  663. SCHEDULE 11 Transitional Provisions and Savings
  664. SCHEDULE 12 Enactments Repealed
  665. SCHEDULE 13 Consequential Amendments of Companies Act 1985
  666. SCHEDULE 14 Consequential Amendments of other Enactments

Proposed changes to this act

No one has proposed a change to this act yet.

666 provisions

298 Removal of trustee; vacation of office.

(1) Subject as follows, the trustee of a bankrupt’s estate may be removed from office only by an order of the court or by a decision of the bankrupt's creditors made by a creditors' decision procedure instigated specially for that purpose in accordance with the rules. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Where the official receiver is trustee by virtue of section 291A(1) or a trustee is appointed by the Secretary of State or (otherwise than under section 291A(2)) by the court, a creditors' decision procedure may be instigated for the purpose of removing the trustee only if— (a) the trustee thinks fit, or (b) the court so directs, or (c) ... one of the bankrupt’s creditors so requests, with the concurrence of not less than one-quarter, in value, of the creditors (including the creditor making the request). (4A) Where the bankrupt's creditors decide to remove a trustee, they may in accordance with the rules appoint another person as trustee in his place. (4B) Where the decision to remove a trustee is made under subsection (4), the decision does not take effect until the bankrupt's creditors appoint another person as trustee in his place. (5) If the trustee was appointed by the Secretary of State, he may be removed by a direction of the Secretary of State. (6) The trustee (not being the official receiver) shall vacate office if he ceases to be a person who is for the time being qualified to act as an insolvency practitioner in relation to the bankrupt. (7) The trustee may, in the prescribed circumstances, resign his office by giving notice of his resignation to the prescribed person. (8) The trustee shall vacate office on giving notice to the prescribed person that the trustee has given notice under section 331(2). (8A) A notice under subsection (8)— (a) must not be given before the end of the period prescribed by the rules as the period within which the bankrupt's creditors may object to the trustee's release, and (b) must state whether any of the bankrupt's creditors objected to the trustee's release. (9) The trustee shall vacate office if the bankruptcy order is annulled.

Propose a change

299 Release of trustee.

(1) Where the official receiver has ceased to be the trustee of a bankrupt’s estate and a person is appointed in his stead, the official receiver shall have his release with effect from the following time, that is to say— (a) where that person is appointed by ... the bankrupt’s creditors or by the Secretary of State, the time at which the official receiver gives notice under this paragraph to the prescribed person that he has been replaced, and (b) where that person is appointed by the court, such time as the court may determine. (2) If the official receiver while he is the trustee gives notice to the Secretary of State that the administration of the bankrupt’s estate in accordance with Chapter IV of this Part is for practical purposes complete, he shall have his release with effect from such time as the Secretary of State may determine. (3) A person other than the official receiver who has ceased to be the trustee shall have his release with effect from the following time, that is to say— (a) in the following cases, the time at which notice is given to the prescribed person in accordance with the rules that that person has ceased to hold office — (i) the person has been removed from office by a decision of the bankrupt's creditors and the creditors have not decided against his release, (ii) the person has died; (b) in the following cases, such time as the Secretary of State may, on an application by the person, determine— (i) the person has been removed from office by a decision of the bankrupt's creditors and the creditors have decided against his release, (ii) the person has been removed from office by the court or by the Secretary of State, (iii) the person has vacated office under section 298(6); (c) in the case of a person who has resigned, such time as may be prescribed; (d) in the case of a person who has vacated office under section 298(8)— (i) if any of the bankrupt's creditors objected to the person's release before the end of the period for so objecting prescribed by the rules, such time as the Secretary of State may, on an application by that person, determine, and (ii) otherwise, the time at which the person vacated office. (3A) Where the person is removed from office by a decision of the bankrupt's creditors, any decision of the bankrupt's creditors as to whether the person should have his release must be made by a creditors' decision procedure. (4) Where a bankruptcy order is annulled, the trustee at the time of the annulment has his release with effect from such time as the court may determine. (5) Where the offical receiver or the trustee has his release under this section, he shall, with effect from the time specified in the preceeding provisions of this section, be discharged from all liability both in respect of acts or omissions of his in the administration of the estate and otherwise in relation to his conduct as trustee. But nothing in this section prevents the exercise, in relation to a person who has had his release under this section, of the court’s powers under section 304.

Propose a change

300 Vacancy in office as trustee.

(1) This section applies where the appointment of any person as trustee of a bankrupt’s estate fails to take effect or, such an appointment having taken effect, there is otherwise a vacancy in the office of trustee. (2) The official receiver shall be trustee until the vacancy is filled. (3) The official receiver may ask the bankrupt's creditors to appoint a person as trustee, and must do so if so requested by not less than one tenth in value of the bankrupt's creditors. (3A) If the official receiver makes such a request the bankrupt's creditors may in accordance with the rules appoint a person as trustee. (4) If at the end of the period of 28 days beginning with the day on which the vacancy first came to the offical receiver’s attention he has not asked, and is not proposing to ask, the bankrupt's creditors to appoint a person as trustee, he shall refer the need for an appointment to the Secretary of State. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) On a reference to the Secretary of State under subsection (4) . . . the Secretary of State shall either make an appointment or decline to make one. (7) If on a reference under subsection (4) . . . no appointment is made, the official receiver shall continue to be trustee of the bankrupt’s estate, but without prejudice to his power to make a further reference. (8) References in this section to a vacancy include a case where it is necessary, in relation to any property which is or may be comprised in a bankrupt’s estate, to revive the trusteeship of that estate after the vacation of office by the trustee under section 298(8) or the giving by the official receiver of notice under section 299(2).

Propose a change

301 Creditors’ committee.

(1) Subject as follows, a bankrupt's creditors may, in accordance with the rules, establish a committee (known as “the creditors’ committee”) to exercise the functions conferred on it by or under this Act. (2) The bankrupt’s creditors shall not establish such a committee, or confer any functions on such a committee, at any time when the official receiver is the trustee of the bankrupt’s estate, except in connection with the appointment of a person to be trustee instead of the official receiver.

Propose a change

302 Exercise by Secretary of State of functions of creditors’ committee.

(1) The creditors’ committee is not to be able or required to carry out its functions at any time when the official receiver is trustee of the bankrupt’s estate; but at any such time the functions of the committee under this Act shall be vested in the Secretary of State, except to the extent that the rules otherwise provide. (2) Where in the case of any bankruptcy there is for the time being no creditors’ committee and the trustee of the bankrupt’s estate is a person other than the official receiver, the functions of such a committee shall be vested in the Secretary of State, except to the extent that the rules otherwise provide.

Propose a change

303 General control of trustee by the court.

(1) If a bankrupt or any of his creditors or any other person is dissatisfied by any act, omission or decision of a trustee of the bankrupt’s estate, he may apply to the court; and on such an application the court may confirm, reverse or modify any act or decision of the trustee, may give him directions or may make such other order as it thinks fit. (2) The trustee of a bankrupt’s estate may apply to the court for directions in relation to any particular matter arising under the bankruptcy. (2A) Where at any time after a bankruptcy petition has been presented to the court against any person, whether under the provisions of the Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications. (2B) Where a bankruptcy petition has been presented against more than one individual in the circumstances mentioned in subsection (2A) above, the court may give such directions for consolidating the proceedings, or any of them, as it thinks just. (2C) Any order or directions under subsection (2A) or (2B) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.

Propose a change

304 Liability of trustee.

(1) Where on an application under this section the court is satisfied— (a) that the trustee of a bankrupt’s estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt’s estate, or (b) that a bankrupt’s estate has suffered any loss in consequence of any misfeasance or breach of fiduciary or other duty by a trustee of the estate in the carrying out of his functions, the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property (together with interest at such rate as the court thinks just) or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just. This is without prejudice to any liability arising apart from this section. (2) An application under this section may be made by the official receiver, the Secretary of State, a creditor of the bankrupt or (whether or not there is, or is likely to be, a surplus for the purposes of section 330(5) (final distribution)) the bankrupt himself. But the leave of the court is required for the making of an application if it is to be made by the bankrupt or if it is to be made after the trustee has had his release under section 299. (3) Where— (a) the trustee seizes or disposes of any property which is not comprised in the bankrupts estate, and (b) at the time of the seizure or disposal the trustee 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 trustee is not liable to any person (whether under this section or otherwise) 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 the negligence of the trustee; 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.

Propose a change

305 General functions of trustee.

(1) This Chapter applies in relation to any bankruptcy where either— (a) the appointment of a person as trustee of a bankrupt’s estate takes effect, or (b) the official receiver becomes trustee of a bankrupt’s estate. (2) The function of the trustee is to get in, realise and distribute the bankrupt’s estate in accordance with the following provisions of this Chapter; and in the carrying out of that function and in the management of the bankrupt’s estate the trustee is entitled, subject to those provisions, to use his own discretion. (3) It is the duty of the trustee, if he is not the official receiver— (a) to furnish the official receiver with such information, (b) to produce to the offical receiver, and permit inspection by the official receiver of, such books, papers and other records, and (c) to give the official receiver such other assistance, as the official receiver may reasonably require for the purpose of enabling him to carry out his functions in relation to the bankruptcy. (4) The official name of the trustee shall be “the trustee of the estate of ............, a bankrupt” (inserting the name of the bankrupt); but he may be referred to as “the trustee in bankruptcy” of the particular bankrupt.

Propose a change

306 Vesting of bankrupt’s estate in trustee.

(1) The bankrupt’s estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee. (2) Where any property which is, or is to be, comprised in the bankrupt’s estate vests in the trustee (whether under this section or under any other provision of this Part), it shall so vest without any conveyance, assignment or transfer.

Propose a change

306A Property subject to restraint order

(1) This section applies where— (a) property is excluded from the bankrupt’s estate by virtue of section 417(2)(a) of the Proceeds of Crime Act 2002 (property subject to a restraint order), (b) an order under section 50, 67A, 128, 131A, 198 or 215A of that Act has not been made in respect of the property, ... (c) the restraint order is discharged , and (d) immediately after the discharge of the restraint order the property is not detained under or by virtue of section 44A, 47J, 122A, 127J, 193A or 195J of that Act. (2) The property vests in the trustee as part of the bankrupt's estate. (3) But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).

Propose a change

306AA Property released from detention

(1) This section applies where— (a) property is excluded from the bankrupt's estate by virtue of section 417(2)(b) of the Proceeds of Crime Act 2002 (property detained under certain provisions), (b) no order is in force in respect of the property under section 41, 50, 120, 128, 190 or 198 of that Act, and (c) the property is released. (2) The property vests in the trustee as part of the bankrupt's estate.

Propose a change

306B Property in respect of which receivership or administration order made

(1) This section applies where— (a) property is excluded from the bankrupt’s estate by virtue of section 417(2)(c) of the Proceeds of Crime Act 2002 (property in respect of which an order for the appointment of a receiver or administrator under certain provisions of that Act is in force), (b) a confiscation order is made under section 6, 92 or 156 of that Act, (c) the amount payable under the confiscation order is fully paid, and (d) any of the property remains in the hands of the receiver or administrator (as the case may be). (2) The property vests in the trustee as part of the bankrupt’s estate.

Propose a change

306BA Property in respect of which realisation order made

(1) This section applies where— (a) property is excluded from the bankrupt's estate by virtue of section 417(2)(d) of the Proceeds of Crime Act 2002 (property in respect of which an order has been made authorising realisation of the property by an appropriate officer), (b) a confiscation order is made under section 6, 92 or 156 of that Act, (c) the amount payable under the confiscation order is fully paid, and (d) any of the property remains in the hands of the appropriate officer. (2) The property vests in the trustee as part of the bankrupt's estate.

Propose a change

306C Property subject to certain orders where confiscation order discharged or quashed

(1) This section applies where— (a) property is excluded from the bankrupt’s estate by virtue of section 417(2)(a), (b), (c) or (d) of the Proceeds of Crime Act 2002 (property excluded from bankrupt's estate ), (b) a confiscation order is made under section 6, 92 or 156 of that Act, and (c) the confiscation order is discharged under section 30, 114 or 180 of that Act (as the case may be) or quashed under that Act or in pursuance of any enactment relating to appeals against conviction or sentence. (2) Any such property vests in the trustee as part of the bankrupt's estate if it is in the hands of— (a) a receiver appointed under Part 2 or 4 of that Act, (b) an administrator appointed under Part 3 of that Act, (c) an appropriate officer (within the meaning of section 41A, 120A or 190A of that Act). (3) But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).

Propose a change

307 After-acquired property.

(1) Subject to this section and section 309, the trustee may by notice in writing claim for the bankrupt’s estate any property which has been acquired by, or has devolved upon, the bankrupt since the commencement of the bankruptcy. (2) A notice under this section shall not be served in respect of— (a) any property falling within subsection (2) or (3) of section 283 in Chapter II, (aa) any property vesting in the bankrupt by virtue of section 283A in Chapter II, (b) any property which by virtue of any other enactment is excluded from the bankrupt’s estate, or (c) without prejudice to section 280(2)(c) (order of court on application for discharge), any property which is acquired by, or devolves upon, the bankrupt after his discharge. (3) Subject to subsections (4) and (4A) , upon the service on the bankrupt of a notice under this section the property to which the notice relates shall vest in the trustee as part of the bankrupt’s estate; and the trustee’s title to that property has relation back to the time at which the property was acquired by, or devolved upon, the bankrupt. (4) Where, whether before or after service on the bankrupt of a notice under this section— (a) a person acquires property in good faith, for value and without notice of the bankruptcy, ... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the trustee is not in respect of that property ... entitled by virtue of this section to any remedy against that person ..., or any person whose title to any property derives from that person .... (4A) Where a banker enters into a transaction before service on the banker of a notice under this section (and whether before or after service on the bankrupt of a notice under this section) the trustee is not in respect of that transaction entitled by virtue of this section to any remedy against the banker. This subsection applies whether or not the banker has notice of the bankruptcy. (5) References in this section to property do not include any property which, as part of the bankrupt’s income, may be the subject of an income payments order under section 310.

Propose a change

308 Vesting in trustee of certain items of excess value.

(1) Subject to section 309, where— (a) property is excluded by virtue of section 283(2) (tools of trade, household effects, etc.) from the bankrupt’s estate, and (b) it appears to the trustee that the realisable value of the whole or any part of that property exceeds the cost of a reasonable replacement for that property or that part of it, the trustee may by notice in writing claim that property or, as the case may be, that part of it, for the bankrupt’s estate. (2) Upon the service on the bankrupt of a notice under this section, the property to which the notice relates vests in the trustee as part of the bankrupt’s estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee’s title to that property has relation back to the commencement of the bankruptcy. (3) The trustee shall apply funds comprised in the estate to the purchase by or on behalf of the bankrupt of a reasonable replacement for any property vested in the trustee under this section; and the duty imposed by this subsection has priority over the obligation of the trustee to distribute the estate. (4) For the purposes of this section property is a reasonable replacement for other property if it is reasonably adequate for meeting the needs met by the other property.

Propose a change

308A Vesting in trustee of certain tenancies.

Upon the service on the bankrupt by the trustee of a notice in writing under this section, any tenancy— (a) which is excluded by virtue of section 283(3A) from the bankrupt’s estate, and (b) to which the notice relates, vests in the trustee as part of the bankrupt’s estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee’s title to that tenancy has relation back to the commencement of the bankruptcy.

Propose a change

309 Time-limit for notice under s. 307 or 308.

(1) Except with the leave of the court, a notice shall not be served— (a) under section 307, after the end of the period of 42 days beginning with the day on which it first came to the knowledge of the trustee that property in question had been acquired by, or had devolved upon, the bankrupt; (b) under section 308 or section 308A, after the end of the period of 42 days beginning with the day on which the property or tenancy in question first came to the knowledge of the trustee. (2) For the purposes of this section— (a) any thing which comes to the knowledge of the trustee is deemed in relation to any successor of his as trustee to have come to the knowledge of the sucessor at the same time; and (b) any thing which comes (otherwise than under paragraph (a)) to the knowledge of a person before he is the trustee is deemed to come to his knowledge on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.

Propose a change

310 Income payments orders.

(1) The court may . . . make an order (“an income payments order”) claiming for the bankrupt’s estate so much of the income of the bankrupt during the period for which the order is in force as may be specified in the order. (1A) An income payments order may be made only on an application instituted— (a) by the trustee, and (b) before the discharge of the bankrupt. (2) The court shall not make an income payments order the effect of which would be to reduce the income of the bankrupt when taken together with any payments to which subsection (8) applies below what appears to the court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family. (3) An income payments order shall, in respect of any payment of income to which it is to apply, either— (a) require the bankrupt to pay the trustee an amount equal to so much of that payment as is claimed by the order, or (b) require the person making the payment to pay so much of it as is so claimed to the trustee, instead of to the bankrupt. (4) Where the court makes an income payments order it may, if it thinks fit, discharge or vary any attachment of earnings order that is for the time being in force to secure payments by the bankrupt. (5) Sums received by the trustee under an income payments order form part of the bankrupt’s estate. (6) An income payments order must specify the period during which it is to have effect; and that period— (a) may end after the discharge of the bankrupt, but (b) may not end after the period of three years beginning with the date on which the order is made. (6A) An income payments order may (subject to subsection (6)(b)) be varied on the application of the trustee or the bankrupt (whether before or after discharge). (7) For the purposes of this section the income of the bankrupt comprises every payment in the nature of income which is from time to time made to him or to which he from time to time becomes entitled, including any payment in respect of the carrying on of any business or in respect of any office or employment and (despite anything in section 11 or 12 of the Welfare Reform and Pensions Act 1999) any payment under a pension scheme but excluding any payment to which subsection (8) applies.. (8) This subsection applies to— (a) payments by way of guaranteed minimum pension; ... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) In this section, “guaranteed minimum pension” has the same meaning as in the Pension Schemes Act 1993.

Propose a change

310A Income payments agreement

(1) In this section “income payments agreement” means a written agreement between a bankrupt and his trustee or between a bankrupt and the official receiver which provides— (a) that the bankrupt is to pay to the trustee or the official receiver an amount equal to a specified part or proportion of the bankrupt’s income for a specified period, or (b) that a third person is to pay to the trustee or the official receiver a specified proportion of money due to the bankrupt by way of income for a specified period. (2) A provision of an income payments agreement of a kind specified in subsection (1)(a) or (b) may be enforced as if it were a provision of an income payments order. (3) While an income payments agreement is in force the court may, on the application of the bankrupt, his trustee or the official receiver, discharge or vary an attachment of earnings order that is for the time being in force to secure payments by the bankrupt. (4) The following provisions of section 310 shall apply to an income payments agreement as they apply to an income payments order— (a) subsection (5) (receipts to form part of estate), and (b) subsections (7) to (9) (meaning of income). (5) An income payments agreement must specify the period during which it is to have effect; and that period— (a) may end after the discharge of the bankrupt, but (b) may not end after the period of three years beginning with the date on which the agreement is made. (6) An income payments agreement may (subject to subsection (5)(b)) be varied— (a) by written agreement between the parties, or (b) by the court on an application made by the bankrupt, the trustee or the official receiver. (7) The court— (a) may not vary an income payments agreement so as to include provision of a kind which could not be included in an income payments order, and (b) shall grant an application to vary an income payments agreement if and to the extent that the court thinks variation necessary to avoid the effect mentioned in section 310(2).

Propose a change

311 Acquisition by trustee of control.

(1) The trustee shall take possession of all books, papers and other records which relate to the bankrupt’s estate or affairs and which belong to him or are in his possession or under his control (including any which would be privileged from disclosure in any proceedings). (2) In relation to, and for the purpose of acquiring or retaining possession of, the bankrupt’s estate, the trustee is in the same position as if her were a receiver of property appointed by the High Court; and the court may, on his application, enforce such acquisition or retention accordingly. (3) Where any part of the bankrupt’s estate consists of stock or shares in a company, shares in a ship or any other property transferable in the books of a company, office or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt. (4) Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee; but notice of the deemed assignment need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself for protecting the priority of the trustee. (5) Where any goods comprised in the estate are held by any person by way of pledge, pawn or other security and no notice has been served in respect of those goods by the official receiver under subsection (5) of section 285 (restriction on realising security), the trustee may serve such a notice in respect of the goods; and whether or not a notice has been served under this subsection or that subsection, the trustee may, if he thinks fit, exercise the bankrupt’s right of redemption in respect of any such goods. (6) A notice served by the trustee under subsection (5) has the same effect as a notice served by the official receiver under section 285(5).

Propose a change

312 Obligation to surrender control to trustee.

(1) The bankrupt shall deliver up to the trustee possession of any property, books, papers or other records of which he has possession or control and of which the trustee is required to take possession. This is without prejudice to the general duties of the bankrupt under section 333 in this Chapter. (2) If any of the following is in possession of any property, books, papers or other records of which the trustee is required to take possession, namely— (a) the official receiver, (b) a person who has ceased to be trustee of the bankrupt’s estate, or (c) a person who has been the supervisor of a voluntary arrangement approved in relation to the bankrupt under Part VIII, the official receiver or, as the case may be, that person shall deliver up possession of the property, books, papers or records to the trustee. (3) Any banker or agent of the bankrupt or any other person who holds any property to the account of, or for, the bankrupt shall pay or deliver to the trustee all property in his possession or under his control which forms part of the bankrupt’s estate and which he is not by law entitled to retain as against the bankrupt or trustee. (4) If any person 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).

Propose a change

313 Charge on bankrupt’s home.

(1) Where any property consisting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse or by his civil partner or former civil partner is comprised in the bankrupt’s estate and the trustee is, for any reason, unable for the time being to realise that property, the trustee may apply to the court for an order imposing a charge on the property for the benefit of the bankrupt’s estate. (2) If on an application under this section the court imposes a charge on any property, the benefit of that charge shall be comprised in the bankrupt’s estate and is enforceable , up to the charged value from time to time, for the payment of any amount which is payable otherwise than to the bankrupt out of the estate and of interest on that amount at the prescribed rate. (2A) In subsection (2) the charged value means— (a) the amount specified in the charging order as the value of the bankrupt’s interest in the property at the date of the order, plus (b) interest on that amount from the date of the charging order at the prescribed rate. (2B) In determining the value of an interest for the purposes of this section the court shall disregard any matter which it is required to disregard by the rules. (3) An order under this section made in respect of property vested in the trustee shall provide, in accordance with the rules, for the property to cease to be comprised in the bankrupt’s estate and, subject to the charge (and any prior charge), to vest in the bankrupt. (4) Subsection (1), (2), (4), (5) and (6) of section 3 of the Charging Orders Act 1979 (supplemental provisions with respect to charging orders) have effect in relation to orders under this section as in relation to charging orders under that Act. (5) But an order under section 3(5) of that Act may not vary a charged value.

Propose a change

313A Low value home: application for sale, possession or charge

(1) This section applies where— (a) property comprised in the bankrupt’s estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of— (i) the bankrupt, (ii) the bankrupt’s spouse or civil partner, or (iii) a former spouse or former civil partner of the bankrupt, and (b) the trustee applies for an order for the sale of the property, for an order for possession of the property or for an order under section 313 in respect of the property. (2) The court shall dismiss the application if the value of the interest is below the amount prescribed for the purposes of this subsection. (3) In determining the value of an interest for the purposes of this section the court shall disregard any matter which it is required to disregard by the order which prescribes the amount for the purposes of subsection (2).

Propose a change

314 Powers of trustee.

(1) The trustee may exercise any of the powers specified in Parts 1 and 2 of Schedule 5. (2) ... the trustee may appoint the bankrupt— (a) to superintend the management of his estate or any part of it, (b) to carry on his business (if any) for the benefit of his creditors, or (c) in any other respect to assist in administering the estate in such manner and on such terms as the trustee may direct. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Part III of Schedule 5 to this Act has effect with respect to the things which the trustee is able to do for the purposes of, or in connection with, the exercise of any of his powers under any of his Group of Parts. (6) Where the trustee (not being the official receiver) in exercise of the powers conferred on him by any provision in this Group of Parts— (a) disposes of any property comprised in the bankrupt’s estate to an associate of the bankrupt, or (b) employs a solicitor, he shall, if there is for the time being a creditor’s committee, give notice to the committee of that exercise of his powers. (7) Without prejudice to the generality of subsection (5) and Part III of Schedule 5, the trustee may, if he thinks fit, at any time seek a decision on a matter from the bankrupt’s creditors. Subject to the preceding provisions in this Group of Parts, he shall seek a decision on a matter if he is requested to do so by a creditor of the bankrupt and the request is made with the concurrence of not less than one-tenth, in value, of the bankrupt’s creditors (including the creditor making the request). (8) Nothing in this Act is to be construed as restricting the capacity of the trustee to exercise any of his powers outside England and Wales.

Propose a change

315 Disclaimer (general power).

(1) Subject as follows, the trustee may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it or otherwise exercised rights of ownership in relation to it. (2) The following is onerous property for the purposes of this section, that is to say— (a) any unprofitable contract, and (b) any other property comprised in the bankrupt’s estate which is unsaleable or not readily saleable, or is such that it may give rise to a liability to pay money or perform any other onerous act. (3) A disclaimer under this section— (a) operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the bankrupt and his estate in or in respect of the property disclaimed, and (b) discharges the trustee from all personal liability in respect of that property as from the commencement of his trusteeship, but does not, except so far as is necessary for the purpose of releasing the bankrupt, the bankrupt’s estate and the trustee from any liability, affect the rights or liabilities of any other person. (4) A notice of disclaimer shall not be given under this section in respect of any property that has been claimed for the estate under section 307 (after-acquired property) or 308 (personal property of bankrupt exceeding reasonable replacement value) or 308A, except with the leave of the court. (5) Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed to be a creditor of the bankrupt to the extent of the loss or damage and accordingly may prove for the loss or damage as a bankruptcy debt.

Propose a change

316 Notice requiring trustee’s decision.

(1) Notice of disclaimer shall not be given under section 315 in respect of any property if— (a) a person interested in the property has applied in writing to the trustee or one of his predecessors as trustee requiring the trustee or that predecessor to decide whether he will disclaim or not, and (b) the period of 28 days beginning with the day on which that application was made has expired without a notice of disclaimer having been given under section 315 in respect of that property. (2) The trustee is deemed to have adopted any contract which by virtue of this section he is not entitled to disclaim.

Propose a change

317 Disclaimer of leaseholds.

(1) The disclaimer of any property of a leasehold nature does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person claiming under the bankrupt as underlessee or mortgagee and either— (a) no application under section 320 below is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this subsection was served, or (b) where such an application has been made, the court directs that the disclaimer is to take effect. (2) Where the court gives a direction under subsection (1)(b) it may also, instead of or in addition to any order it makes under section 320, make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the lease as it thinks fit.

Propose a change

318 Disclaimer of dwelling house.

Without prejudice to section 317, the disclaimer of any property in a dwelling house does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person in occupation of or claiming a right to occupy the dwelling house and either— (a) no application under section 320 is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this section was served, or (b) where such an application has been made, the court directs that the disclaimer is to take effect.

Propose a change

319 Disclaimer of land subject to rentcharge.

(1) The following applies where, in consequence of the disclaimer under section 315 of any land subject to a rentcharge, that land vests by operation of law in the Crown or any other person (referred to in the next subsection as “the proprietor”). (2) The proprietor, and the successors in title of the proprietor, are not subject to any personal liability in respect of any sums becoming due under the rentcharge, except sums becoming due after the proprietor, or some person claiming under or through the proprietor, has taken possession or control of the land or has entered into occupation of it.

Propose a change

320 Court order vesting disclaimed property.

(1) This section and the next apply where the trustee has disclaimed property under section 315. (2) An application may be made to the court under this section by— (a) any person who claims an interest in the disclaimed property, (b) any person who is under any liability in respect of the disclaimed property, not being a liability discharged by the disclaimer, or (c) where the disclaimed property is property in a dwelling house, any person who at the time when the bankruptcy application was made or (as the case may be) the bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house. (3) Subject as follows in this section and the next, the court may, on an application under this section, make an order on such terms as it thinks fit for the vesting of the disclaimed property in, or for its delivery to— (a) a person entitled to it or a trustee for such a person, (b) a person subject to such a liability as is mentioned in subsection (2)(b) or a trustee for such a person, or (c) where the disclaimed property is property in a dwelling house, any person who at the time when the bankruptcy application was made or (as the case may be) the bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house. (4) The court shall not make an order by virtue of subsection (3)(b) except where it appears to the court that it would be just to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer. (5) The effect of any order under this section shall be taken into account in assessing for the purposes of section 315(5) the extent of any loss or damage sustained by any person in consequence of the disclaimer. (6) An order under this section vesting property in any person need not be completed by any conveyance, assignment or transfer.

Propose a change

321 Order under s. 320 in respect of leaseholds.

(1) The court shall not make an order under section 320 vesting property of a leasehold nature in any person, except on terms making that person— (a) subject to the same liabilities and obligations as the bankrupt was subject to under the lease on the day the bankruptcy application was made or (as the case may be) the bankruptcy petition was presented, or (b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him on that day. (2) For the purposes of an order under section 320 relating to only part of any property comprised in a lease, the requirements of subsection (1) apply as if the lease comprised only the property to which the order relates. (3) Where subsection (1) applies and no person is willing to accept an order under section 320 on the terms required by that subsection, the court may (by order under section 320) vest the estate or interest in the bankrupt in the property in any person who is liable (whether personally or in a representative capacity and whether alone or jointly with the bankrupt) to perform the lessee’s covenants in the lease. The court may by virtue of this subsection vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the bankrupt. (4) Where subsection (1) applies and a person declines to accept any order under section 320, that person shall be excluded from all interest in the property.

Propose a change

322 Proof of debts.

(1) Subject to this section and the next, the proof of any bankruptcy debt by a secured or unsecured creditor of the bankrupt and the admission or rejection of any proof shall take place in accordance with the rules. (2) Where a bankruptcy debt bears interest, that interest is provable as part of the debt except in so far as it is payable in respect of any period after the commencement of the bankruptcy. (3) The trustee shall estimate the value of any bankruptcy debt which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value. (4) Where the value of a bankruptcy debt is estimated by the trustee under subsection (3) or, by virtue of section 303 in Chapter III, by the court, the amount provable in the bankruptcy in respect of the debt is the amount of the estimate.

Propose a change

323 Mutual credit and set-off.

(1) This section applies where before the commencement of the bankruptcy there have been mutual credits, mutual debts or other mutual dealings between the bankruptcy and any creditor of the bankrupt proving or claiming to prove for a bankruptcy debt. (2) An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other. (3) Sums due from the bankrupt to another party shall not be included in the account taken under subsection (2) if that other party had notice at the time they became due that proceedings on a bankruptcy application relating to the bankrupt were ongoing or that a bankruptcy petition relating to the bankrupt was pending. (4) Only the balance (if any) of the account taken under subsection (2) is provable as a bankruptcy debt or, as the case may be, to be paid to the trustee as part of the bankrupt’s estate.

Propose a change

324 Distribution by means of dividend.

(1) Whenever the trustee has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the bankruptcy, declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have respectively proved. (2) The trustee shall give notice of his intention to declare and distribute a dividend. (3) Where the trustee has declared a dividend, he shall give notice of the dividend and of how it is proposed to distribute it; and a notice given under this subsection shall contain the prescribed particulars of the bankrupt’s estate. (4) In the calculation and distribution of a dividend the trustee shall make provision— (a) for any bankruptcy debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs, (b) for any bankruptcy debts which are the subject of claims which have not yet been determined, and (c) for disputed proofs and claims.

Propose a change

325 Claims by unsatisfied creditors.

(1) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but— (a) when he has proved that debt he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receive; and (b) any dividend or dividends payable under paragraph (a) shall be paid before that money is applied to the payment of any such further dividend. (2) No action lies against the trustee for a dividend,but if the trustee refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money— (a) interest on the dividend, at the rate for the time being specified in section 17 of the JudgmentsAct 1838, from the time it was withheld, and (b) the costs of the proceedings in which the order to pay is made.

Propose a change

326 Distribution of property in specie.

(1) Without prejudice to sections 315 to 319 (disclaimer), the trustee may, with the permission of the creditors’ committee, divide in its existing form amongst the bankrupt’s creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold. (2) A permission given for the purposes of subsection (1) shall not be a general permission but shall relate to a particular proposed exercise of the power in question; and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required by subsection (1) has been given. (3) Where the trustee has done anything without the permission required by subsection (1), the court or the creditors’ committee may, for the purpose of enabling him to meet his expenses out of the bankrupt’s estate, ratify what the trustee has done. But the committee shall not do so unless it is satisfied that the trustee acted in a case of urgency and has sought its ratification without undue delay.

Propose a change

327 Distribution in criminal bankruptcy.

Where the bankruptcy order was made on a petition under section 264(1)(d) (criminal bankruptcy), no distribution shall be made under sections 324 to 326 so long as an appeal is pending (within the meaning of section 277) against the bankrupt’s conviction of any offence by virtue of which the criminal bankruptcy order on which the petition was based was made.

Propose a change

328 Priority of debts.

(1) In the distribution of the bankrupt’s estate, his preferential debts ... shall be paid in priority to other debts. (1A) Ordinary preferential debts rank equally among themselves after the expenses of the bankruptcy and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions between themselves. (1B) Secondary preferential debts rank equally among themselves after the ordinary preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions between themselves. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Debts which are neither preferential debts nor debts to which the next section applies also rank equally between themselves and, after the preferential debts, shall be paid in full unless the bankrupt’s estate is insufficient for meeting them, in which case they abate in equal proportions between themselves. (3A) If the bankrupt is a relevant financial institution, subsection (3) does not apply but— (a) the bankrupt’s ordinary non-preferential debts shall be paid in priority to the bankrupt’s secondary non-preferential debts, (b) the bankrupt’s ordinary non-preferential debts rank equally among themselves after the secondary preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions, (c) the bankrupt’s secondary non-preferential debts shall be paid in priority to the bankrupt’s tertiary non-preferential debts, and (d) the bankrupt’s secondary non-preferential debts rank equally among themselves after the ordinary non-preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions. See section 387A for definitions relevant to this subsection. (4) Any surplus remaining after the payment of the debts — (a) where subsection (3) applies, that are preferential or rank equally under that subsection, or (b) where subsection (3A) applies, that are preferential or are referred to in that subsection, shall be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy; and interest on preferential debts ranks equally with interest on debts other than preferential debts. (5) The rate of interest payable under subsection (4) in respect of any debt is whichever is the greater of the following— (a) the rate specified in section 17 of the Judgments Act 1838 at the commencement of the bankruptcy, and (b) the rate applicable to that debt apart from the bankruptcy. (6) This section and the next are without prejudice to any provision of this Act or any other Act under which the payment of any debt or the making of any other payment is, in the event of bankruptcy, to have a particular priority or to be postponed. (7) In this section “preferential debts”, “ordinary preferential debts” and “secondary preferential debts” each has the meaning given in section 386 in Part 12.

Propose a change

329 Debts to spouse.

(1) This section applies to bankruptcy debts owed in respect of credit provided by a person who (whether or not the bankrupt’s spouse or civil partner at the time the credit was provided) was the bankrupt’s spouse or civil partner at the commencement of the bankruptcy. (2) Such debts— (a) rank in priority after the ... interest required to be paid in pursuance of section 328(4), and (b) are payable with interest at the rate specified in section 328(5) in respect of the period during which they have been outstanding since the commencement of the bankruptcy; and the interest payable under paragraph (b) has the same priority as the debts on which it is payable.

Propose a change

← Find another law