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.




(810) BANKRUPTCY PART I - GENERAL INFORMATION ABOUT BANKRUPTCY AND THE FIRST STEP ON THE BANKRUPTCY PROCEEDING

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This recording deals with individuals or a group of individuals in business as a partnership who are made bankrupt by order of a Court. The purpose of the bankruptcy legislation is to protect both the debtor and his creditors. The creditors wish to ensure the debtor's assets are available to all of them so that the debtor does not sell them or run away or pay off one creditor and forget about the others. The debtor on the other hand may wish to be protected against Court proceedings or harassment from anxious creditors.

In brief, there are two ways for a person to become a bankrupt, that is, by himself and by creditors.

A debtor can present to the Court his own petition for bankruptcy. He must show that he is unable to pay his debts. The petition must be accompanied by a statement of all his assets and liabilities.

For a creditor to make a debtor bankrupt, the debtor must owe the creditor not less than $10,000-. A creditor must first serve on a debtor a written demand in a form prescribed by the Bankruptcy Ordinance demanding payment within 3 weeks Alternatively, he must have an outstanding judgment debt against the debtor. If the debtor either fails to pay the creditor within 3 weeks of the written demand or execution of the judgment debt has been unsuccessful, then the creditor can present a petition to the Court for the bankruptcy of the debtor.

A petitioner can be employee who has not been paid his wages. The minimum debt of $10,000- can be made up of several debts. Therefore a few employees who together are owed $10,000- or more can all be petitioners in one petition.

On presenting the petition, a hearing date will be fixed by the Court.

Date of amendment: 23rd November 1998