The following can only be a brief introduction of the legal subject concerned. Before you take any action which may have legal consequence, you should first seek advice from your own lawyer or make an appointment at any District Office to see a volunteer lawyer of the Free Legal Advice Scheme.




(811) BANKRUPTCY PART II - GENERAL INFORMATION ABOUT BANKRUPTCY AND THE SECOND STEP ON THE BANKRUPTCY PROCEEDING

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You will remember that on presenting the bankruptcy petition, the Court will fix a hearing date.

At the Court hearing, if the debt remains unpaid, a bankruptcy order may be made and the Official Receiver will take into possession all of the debtor's properties. As he ceases to have control over his assets, a debtor will commit an offence if he attempts to hide or dispose of them.

The Official Receiver will interview the debtor and make a list of all of his assets and freeze his bank accounts. The Official Receiver will also require the debtor to file a full financial statement of all his assets and liabilities. This is called "The Statement of Affairs".

A meeting of creditors is usually convened by the Official Receiver. At this meeting the creditors will be asked to appoint a trustee in bankruptcy in place of the Official Receiver. The function of the trustee is to collect the assets of the bankrupt and distribute them proportionally to the creditors.

To avoid bankruptcy or to annul a bankruptcy order, a debtor may present a proposal to the Court for settling the claims with his creditors and to nominate a person to carry out the proposal. If the Court accepts the proposal, no creditors will be able to sue him or to seize his properties or to present a bankruptcy petition against him. If he is a bankrupt at the time of making the proposal, the Court will annul the bankruptcy order.

Date of amendment: 23rd November 1998