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Act of bankruptcy in United Kingdom

Act of bankruptcy in the Business Encyclopaedia and Legal Adviser

Based on the Business Encyclopaedia and Legal Adviser , by W.S.M. Knight, Barrister –at – Law.

A person becomes a bankrupt only after petition to the Court. The petition may be presented by the debtor himself or by the creditor. But unless the debtor himself presents the petition; or unless the Court, on the hearing of a judgment summons, instead of exercising its jurisdiction to commit the debtor to prison, makes, with the consent of the creditor, a receiving order against the debtor, the petition can only be presented when the debtor has already committed an act of bankruptcy. The following are acts of bankruptcy, the commission by the debtor of either or any of what entitles a creditor to present a petition:

  • If in England or elsewhere he makes a conveyance or assignment of his property to a trustee or trustees, for the benefit of his creditors generally.
  • If in England or elsewhere he makes a fraudulent conveyance, gift, delivery, or transfer of his property, or of any part therefore.
  • If in England or elsewhere he makes any conveyance or transfer of his property, or any part therefore, or creates any charge thereon which would, under the (English) Bankruptcy or any other Acts, be void, as a fraudulent preference, if he were adjudged bankrupt.

Upon these three acts of bankruptcy it may be observed that it is enough if the property disposed of is substantially, and not absolutely, the whole of the debtor’s estate. Whether a disposition is fraudulent will depend in each case upon the circumstances; though, as a general test, it is enough to consider the consideration for the disposition. accordingly, a sale of the whole of the debtor’s property for a fair price is not fraudulent and cannot be impeached. And so in the case of a mortgage of the whole of a debtor’s property, where the mortgage is a security partly for a past debt, and partly for a substantial further advance. But here the test should not be confined to the consideration. It must also appear that the mortgage was made bone fide for the purpose of enabling the debtor to continue his business, and was not merely a scheme for the payment of the existing debt.

To proceed with the enumeration of the acts of bankruptcy:

  • If, with intent to defeat or delay his creditors, the debtor does any of the following things, viz., departs out of England, or being out of England, remains out of England, or departs from his dwelling-house, or otherwise absents himself, or begins to keep house. As to this, a debtor who says time after time, ” I will meet you at a certain public-house, or such and such a place, at such and such a time, and pay you the money,” and heis not there, commits an act of bankruptcy. So did a lady who disguised herself under an alias; and another debtor who told his boy to say to an agent of his creditors, that he was not at hope, though the agent could see him through a glass partition.
  • If execution against the debtor has been levied by seizure of his goods, under process, in an action in any Court, or in any civil proceeding in the High Court, and the goods have been either sold or held by the sheriff for twenty-one days: provided that, where an interpleader summons has been taken out in regard to the goods seized, the time elapsing between the date at which such summons is taken out, and the date at which the Sheriff is ordered to withdraw, or any interpleader issue ordered thereon is finally disposed of, shall not be taken into account in calculating such period of twenty-one days.
  • If the debtor files in Court a declaration of his inability to pay his debts, or presents a bankruptcy petition against himself.
  • If a creditor has obtained a final judgment (or who 13 for the time being entitled to enforce a final judgment) against the debtor for any amount, and execution thereon not having been stayed, has served on him in England, or by leave of the Court, elsewhere, a bankruptcy notice requiring him to pay the judgment debt in accordance with the terms of the judgment, or to secure or compound for it to the satisfaction of the creditor or the Court, and he does not, within seven days after service of the notice, in case the service is effected in England, and in case the service is effected elsewhere, then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice unsatisfy the Court that he has a counter-claim, set-off, or cross-demand which equals or exceeds the amount of the judgment debt, and which he could not set up in the action in which the judgment was obtained.

Note: Find out some definitions of Bankruptcy in the legal Dictionaries. And the main entry about Bankruptcy here.

Bankruptcy in other legal encyclopedias

If you search for an entry, then decide you want to see what another legal encyclopedia says about it, you may find your entry in this section.

Link Description
Bankruptcy Bankruptcy in the International Legal Encyclopedia.
Bankruptcy Bankruptcy in the American Legal Encyclopedia.
Bankruptcy Bankruptcy in the Asian Legal Encyclopedia.
Bankruptcy Bankruptcy in the European Legal Encyclopedia.
Bankruptcy Bankruptcy in the Australian Legal Encyclopedia.

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(2015, 02). Act of bankruptcy lawi.org.uk Retrieved 01, 2021, from https://lawi.org.uk/act-of-bankruptcy/

02 2015. 01 2021 <https://lawi.org.uk/act-of-bankruptcy/>

"Act of bankruptcy" lawi.org.uk. lawi.org.uk, 02 2015. Web. 01 2021. <https://lawi.org.uk/act-of-bankruptcy/>

"Act of bankruptcy" lawi.org.uk. 02, 2015. Accesed 01 2021. https://lawi.org.uk/act-of-bankruptcy/

W.S.M. Knight, 'Act of bankruptcy' (lawi.org.uk 2015) <https://lawi.org.uk/act-of-bankruptcy/> accesed 2021 January 25

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Schema Summary

  • Article Name: Act of bankruptcy
  • Author: W.S.M. Knight
  • Description: Act of bankruptcy in the Business Encyclopaedia and Legal Adviser Based on the Business Encyclopaedia and Legal Adviser , [...]

This entry was last updated: October 19, 2016

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