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27 1988

BANKRUPTCY ACT, 1988

PART II

Procedure in Bankruptcy

Acts of bankruptcy.

(1872, s. 21 in pt.)

7. —(1) An individual (in this Act called a “debtor”) commits an act of bankruptcy in each of the following cases—

(a) if in the State or elsewhere he makes a conveyance or assignment of all or substantially all of his property to a trustee or trustees for the benefit of his creditors generally;

(b) if in the State or elsewhere he makes a fraudulent conveyance, gift, delivery or transfer of his property or any part thereof;

(c) if in the State or elsewhere he makes any conveyance or transfer of his property or any part thereof, or creates any charge thereon, which would under this or any other Act be void as a fraudulent preference if he were adjudicated bankrupt;

(d) if with intent to defeat or delay his creditors he leaves the State or being out of the State remains out of the State or departs from his dwelling-house or otherwise absents himself or evades his creditors;

(e) if he files in the Court a declaration of insolvency;

(f) if execution against him has been levied by the seizure of his goods under an order of any court or if a return of no goods has been made by the sheriff or county registrar whether by endorsement on the order or otherwise;

(g) if the creditor presenting a petition has served upon the debtor in the prescribed manner a bankruptcy summons, and he does not within fourteen days after service of the summons pay the sum referred to in the summons or secure or compound for it to the satisfaction of the creditor.

(2) A debtor also commits an act of bankruptcy if he fails to comply with a debtor's summons served pursuant to section 21 (6) of the Bankruptcy (Ireland) Amendment Act, 1872, within the appropriate time thereunder, and section 8 (6) of this Act shall apply to such debtor's summons.

(3) This section applies, so far as it is capable of application, in relation to acts and things and omissions and failures to do acts and things whether occurring before, or partly before and partly after or wholly after, the commencement of this Act.

Bankruptcy summons.

(New: cf. 1872, s. 30 in pt.)

8. —(1) A summons (in this Act referred to as a “bankruptcy summons”) may be granted by the Court to a person (in this section referred to as “the creditor”) who proves that—

(a) a debt of £1,500 or more is due to him by the person against whom the summons is sought,

(b) the debt is a liquidated sum, and

(c) a notice in the prescribed form, requiring payment of the debt, has been served on the debtor.

(2) A bankruptcy summons may be granted to two or more creditors who are not partners and whose debts amount together to £1,000 or more. In such a case, to comply with the requisitions contained in the summons a debtor must pay or compound for the debts or give security for them to all the creditors who are parties to the summons, unless they otherwise agree.

(3) The notice requiring payment of the debt shall set out the particulars of the debt due and shall require payment within four days after service thereof on the debtor.

(4) The bankruptcy summons shall be in the prescribed form.

(5) A debtor served with a bankruptcy summons may apply to the Court in the prescribed manner and within the prescribed time to dismiss the summons.

(6) The Court—

(a) may dismiss the summons with or without costs, and

(b) shall dismiss the summons if satisfied that an issue would arise for trial.

Arrest of absconding debtor.

(1872, ss. 78, 79 and 80)

9. —(1) Where, after a bankruptcy summons has been granted against a debtor and before a petition to adjudicate him bankrupt can be presented against him, it appears to the Court that there is probable cause for believing that he is about to leave the State or to otherwise abscond with a view to avoiding payment of the debt for which the bankruptcy summons was issued or avoiding examination in respect of his affairs or otherwise avoiding or delaying proceedings in bankruptcy, the Court may cause such debtor to be arrested and brought before the Court.

(2) No arrest under this section shall be lawful unless the debtor, before or at the time of his arrest, is served with the bankruptcy summons.

(3) On the debtor offering such security, or making such payment or composition as the Court thinks reasonable, he shall be discharged from custody unless the Court otherwise orders.

(4) Any such security, payment or composition shall not be exempt from the provisions of this Act relating to fraudulent preferences.

Petition.

(1857, s. 116 in pt.)

10. —An application for adjudication shall be by petition verified by the affidavit of the petitioner.

Presenting petition.

(1872, s. 20)

11. —(1) A creditor shall be entitled to present a petition for adjudication against a debtor if—

(a) the debt owing by the debtor to the petitioning creditor (or, if two or more creditors join in presenting the petition, the aggregate amount of debts owing to them) amounts to £1,500 or more,

(1872, s. 21 in pt.)

(b) the debt is a liquidated sum,

(cf. 1857, s. 115)

(c) the act of bankruptcy on which the petition is founded has occurred within three months before the presentation of the petition, and

(New: cf. 1857, s. 409)

(d) the debtor (whether a citizen or not) is domiciled in the State or, within a year before the date of the presentation of the petition, has ordinarily resided or had a dwelling-house or place of business in the State or has carried on business in the State personally or by means of an agent or manager, or is or within the said period has been a member of a partnership which has carried on business in the State by means of a partner, agent or manager.

(1872, s. 21 in pt.)

(2) If a creditor who presents or joins in presenting the petition is a secured creditor, he shall in his petition set out particulars of his security and shall either state that he is willing to give up his security for the benefit of the creditors in the event of the debtor being adjudicated bankrupt or give an estimate of the value of his security. Where a secured creditor gives an estimate of the value of his security, he may be admitted as a petitioning creditor or joint petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated in the same manner as if he were an unsecured creditor but he shall on application being made by the Official Assignee after the date of adjudication give up his security to the Official Assignee for the benefit of the creditors upon payment of such estimated value.

(1857, s. 120)

(3) Any debtor may petition for adjudication against himself.

Petitioning creditor's costs.

(1857, s. 135)

12. —The petitioning creditor shall at his own cost present his petition and prosecute it until the statutory sitting referred to in section 17 (3), and the Court shall at or after the sitting make an order for the payment of such costs out of the estate of the bankrupt in course of priority to be settled by rules of court.

Petition or act of bankruptcy agreed between bankrupt and creditor.

(1857, s. 136)

13. —No petition for adjudication shall be dismissed or adjudication annulled by reason only that the petition or act of bankruptcy has been concerted or agreed upon between the bankrupt or his solicitor and any creditor or other person.

Adjudication: creditor's petition.

(1857, s. 127 in pt.)

14. —(1) Where the petition is presented by a creditor, the Court shall, if satisfied that the requirements of section 11 (1) have been complied with, by order adjudicate the debtor bankrupt.

(1857, s. 129 in pt.; 36/1971, s. 23 (1))

(2) A copy of the order shall be served on the debtor, either personally or by leaving it at his residence or place of business in the State.

Adjudication: debtor's petition.

(RSC, 0.76, r. 37)

15. —Where the petition is presented by a debtor, the Court shall, on proof that he is unable to meet his engagements with his creditors and that his available estate is sufficient to realise at least £1,500, by order adjudicate the debtor bankrupt.

Cause shown against adjudication.

(cf. 1857, s. 129)

16. —(1) The bankrupt may, within three days or such extended time not exceeding fourteen days as the Court thinks fit from the service of the copy of the order of adjudication on him, show cause to the Court against the validity of the adjudication.

(2) On an application to show cause under subsection (1) the Court shall, if within such time the bankrupt shows to its satisfaction that any of the requirements of section 11 (1) have not been complied with, annul the adjudication and may, in any other case, dismiss the application or adjourn it on such conditions as the Court thinks fit, having regard to the interests of the bankrupt, his creditors and any persons who might advance further credit to him.

(3) Nothing in this section shall be construed to prevent the immediate seizure of the goods of the bankrupt on his adjudication.

Notice of adjudication and statutory sitting.

(1857, ss. 129, 130 in pt., cf. s. 353)

17. —(1) This section shall have effect—

(a) in the case of a creditor's petition where cause has not been shown to the satisfaction of the Court for annulling the adjudication within the time for showing cause, on the expiration of that time;

(b) in the case of a debtor's petition under section 15 or the adjudication of an arranging debtor under section 105 , on adjudication.

(2) The Court shall cause notice of the adjudication to be given as soon as may be in the prescribed manner in Iris Oifigiúil and in at least one daily newspaper in circulation in the area where the bankrupt resides.

(3) The Court shall appoint a statutory sitting to be held within three weeks of the publication of the notice at which the bankrupt shall attend and make full disclosure of his property to the Court, and his creditors may prove their debts and choose and appoint a creditors' assignee.

(4) The Court, on adjourning an application to show cause under section 16 (1), may stay publication of notice of the adjudication on security being given by the bankrupt or on such other conditions as the Court thinks fit.

Creditors' assignee.

(1857, ss. 64, 265)

18. —(1) At the statutory sitting referred to in section 17 (3) the creditors may choose and appoint a person (in this Act referred to as the “creditors' assignee”) to represent them in the administration of the bankrupt's estate.

(2) All creditors shall be entitled to vote in such choice in person or by an agent authorised in writing in that behalf, and the choice and appointment shall be made by the major part in value of the creditors.

(3) The Court may reject any person so chosen who appears to the Court unfit to be a creditors' assignee or may remove a creditors' assignee and in the event of a vacancy, however arising, a new choice and appointment may be made in like manner.

(4) For the purposes of appointing a creditors' assignee a creditor may prove his debt.

Duties of bankrupt.

(1857, s. 132 in pt.)

19. —The bankrupt shall—

(a) unless the Court otherwise directs, forthwith deliver up to the Official Assignee such books of account or other papers relating to his estate in his possession or control as the Official Assignee may from time to time request and disclose to him such of them as are in the possession or control of any other person;

(b) deliver up possession of any part of his property which is divisible among his creditors under this Act, and which is for the time being in his possession or control, to the Official Assignee or any person authorised by the Court or otherwise under the provisions of this Act to take possession of it;

(c) unless the Court otherwise directs, within the prescribed time file in the Central Office a statement of affairs in the prescribed form and deliver a copy thereof to the Official Assignee;

(d) give every reasonable assistance to the Official Assignee in the administration of the estate;

(e) disclose to the Official Assignee any after-acquired property.

Change of name or address, etc.

(New)

20. —(1) A bankrupt shall forthwith notify the Official Assignee in writing of any change in his name or address which occurs during his bankruptcy.

(2) For the purposes of subsection (1) a change in the name of a bankrupt shall be deemed to occur if the bankrupt in fact assumes the use of a different name or an additional name.

(3) A bankrupt shall, whenever required by the Official Assignee to do so, forthwith notify the Official Assignee in writing of the nature of any profession, vocation, business or employment in which he is engaged.

(4) A bankrupt who fails to comply with any of the provisions of this section shall be guilty of an offence.

Examination of bankrupt and other persons.

(1857, ss. 305 in pt., 306, 307, 308, 310; cf. 33/1963, s. 245)

21. —(1) The Court may summon before it a bankrupt or any person who is known or suspected to have in his possession or control any property of the bankrupt or to have disposed of any property of the bankrupt or who is supposed to be indebted to the bankrupt, or any person whom the Court deems capable of giving information relating to the trade, dealings, affairs or property of the bankrupt.

(2) The Court may examine him on oath concerning the matters aforesaid, either orally or on written interrogatories, and may reduce his answers to writing and require him to sign them.

(3) The Court may require him to produce any books of account and papers in his possession or control relating to the matters aforesaid but, where he claims any lien on books or papers produced by him, the production shall be without prejudice to that lien and the Court may determine all questions in relation to the lien.

(4) A bankrupt or other person who is examined under this section shall not be entitled to refuse to answer any question put to him on the ground that his answer might incriminate him but none of his answers shall be admissible in evidence against him in any other proceedings, civil or criminal, except in the case of any criminal proceedings for perjury in respect of any such answer.

Admission of debt due to bankrupt.

(cf. 1857, s. 311)

22. —If any person on examination appears to be indebted to the bankrupt or to have in his possession or control any property of the bankrupt, the Court, on the application of the Official Assignee, may order him to pay to the Official Assignee, at such time and in such manner as the Court thinks fit, the amount or any part thereof or to deliver to the Official Assignee such property or any part thereof at such time and in such manner and on such terms as the Court may direct.

Arrest of bankrupt, etc.

(cf. 1857, ss. 124, 125)

23. —(1) Where it appears to the Court, at any time after making an adjudication order, on proof of probable cause for believing that a bankrupt is about to leave the State or otherwise to abscond or has removed or concealed or is about to remove or conceal any of his property with a view to avoiding payment of his debts or avoiding examination in respect of his affairs, or is keeping out of the way and cannot be served with a summons, the Court may cause him to be arrested and brought before it for examination.

(cf. 1857, s. 305 in pt.)

(2) Where a bankrupt has been summoned before the Court pursuant to section 21 and he does not come at the time appointed, not having an excuse (made known to the Court at the time of its sitting and allowed by it) the Court may cause him to be arrested and brought before it for examination.

(cf. 1857, s. 308 in pt.)

(3) Where any person summoned before the Court pursuant to section 21 after being tendered a reasonable sum for his expenses, does not come at the time appointed, not having an excuse (made known to the Court at the time of its sitting and allowed by it), the Court may cause him to be arrested and brought before it for examination.

(4) The provisions of subsections (2) and (3) are without prejudice to the powers of the Court in relation to contempt or enforcement of the attendance of witnesses.

Committal to prison.

(1857, s. 385)

24. —Where the bankrupt or any person summoned or brought before the Court refuses to be sworn or refuses or fails to answer any lawful question put by the Court or does not fully answer any such question or refuses to sign and subscribe his examination when reduced to writing (not having any lawful excuse allowed by the Court) or to comply with any order of the Court under this Act, the Court may order that such person be committed to prison to await the further order of the Court.

Examination of persons in custody.

(1872, s. 73)

25. —Where the bankrupt or any person is in prison pursuant to an order of the Court under section 24 , the Court may by warrant directed to the governor of the prison order that he be brought before the Court. Where such person satisfies the Court that he has complied with its lawful requirements the Court shall order his release from custody. In any other case he may be taken back to prison without any further order.

Release of bankrupt from prison.

(New)

26. —If a bankrupt is in prison by virtue of section 6 of the Enforcement of Court Orders Act, 1940 , in respect of a debt incurred before adjudication, the Court may order his release.

Warrant of seizure.

(1857, s. 72 in pt.)

27. —(1) The Court may by warrant direct the Bankruptcy Inspector or any of his assistants to seize any property of the bankrupt.

(2) An official acting under the warrant may seize any part of the bankrupt's property in the possession or control of the bankrupt and, for the purpose of seizing any such property, may enter and if necessary break open any house, building, room or other place belonging to the bankrupt where any part of his property is believed to be.

Search warrant.

(cf. 1857, s. 326)

28. —Where it appears to the Court that there is reason to believe that any property of the bankrupt is concealed in any house, building, room or other place not belonging to the bankrupt, the Court may grant a search warrant to the Bankruptcy Inspector or any of his assistants, or other person appointed by the Court, who may execute the warrant according to the tenor thereof.

Indemnity for persons acting under warrant.

(1857, s. 327)

29. —The Bankruptcy Inspector or his assistants or other person appointed by the Court shall not be liable for anything done bona fide pursuant to any warrant of the Court.

Actions by Official Assignee and bankrupt's partners.

(cf. 1857, s. 278)

30. —Where a member of a partnership is adjudicated bankrupt the Court may authorise the Official Assignee to commence and prosecute any action in the names of the Official Assignee and of the bankrupt's partner to recover any debt due to or any property of the partners, and any release by such partner of the debt or demand to which the action relates shall be void; but notice of the application for authority to commence the action shall be given to the bankrupt's partner and he may show cause against it and on his application the Court may, if it thinks fit, direct that he shall receive his proper share of the proceeds of the action. If the partner does not claim any benefit from the action he shall be indemnified against costs in respect thereof as the Court directs.

Petition against one or more partners.

(cf. 1857, s. 122)

31. —(1) Any creditor whose debt is sufficient to entitle him to present a petition for adjudication against all the partners of a firm may present a petition against any one or more partners of the firm without including the others.

(2) Where a petition for adjudication is presented against more than one person the Court may make an order of adjudication against one or more of them and dismiss the petition as to the remainder.

Furnishing of partnership accounts to Official Assignee.

(New)

32. —Where a member of a partnership is adjudicated bankrupt the Official Assignee may require the other partner or partners to deliver to the Official Assignee such accounts and information relating to the partnership estate and the bankrupt's interest therein (duly verified by affidavit if necessary) as the Official Assignee may deem necessary.

Duty of bankrupt partner.

(New)

33. —Where a member of a partnership is adjudicated bankrupt he shall deliver to the Official Assignee within the prescribed time a separate statement of affairs in respect of the partnership in the prescribed form.

Joint and separate properties.

(New)

34. —(1) In the case of partners the joint property shall be applicable in the first instance in payment of their joint debts, and the separate property of each partner shall be applicable in the first instance in payment of his separate debts.

(2) Where there is a surplus of the joint property, it shall be dealt with as part of the respective separate properties in proportion to the right and interest of each partner in the joint property.

(3) Where there is a surplus of any separate property it shall be dealt with as part of the joint property so far as necessary to meet any deficiency in the joint property.

Actions on joint contracts.

(New)

35. —Where a bankrupt is a party to a contract jointly with any other person, that other person may sue or be sued in respect of the contract without joining the bankrupt.

Proceedings in partnership name.

(New)

36. —(1) Any two or more persons, being partners, or any person carrying on business under a partnership name, may take proceedings or be proceeded against under this Act in the name of the firm, but in such case the Court may, on application by any person interested, order the names of the persons to be disclosed in such manner, and verified on oath or otherwise, as the Court may direct.

(2) Notwithstanding anything contained in subsection (1) no order of adjudication shall be made against a firm in the firm name but it shall be made against the partners individually with the addition of the firm name.

Limited partnerships.

(33/1963, s. 345 (8))

37. —Subject to such modifications as may be made by rules of court, the provisions of this Act shall apply to limited partnerships in like manner as if limited partnerships were ordinary partnerships and, on all the general partners of a limited partnership being adjudicated bankrupt, the assets of the limited partnership shall vest in the Official Assignee.

Composition after Bankruptcy

Stay on realisation of estate.

(New)

38. —The Court may, on the application of a bankrupt, grant a stay on the realisation of his estate, for such time and under such conditions as it thinks fit, to enable him or any persons acting on his behalf to make an offer of composition to his creditors under section 39 .

Offer of composition.

(cf. 1857, ss. 149, 150 in pt.; 1872, s. 61)

39. —(1) Where a stay on the realisation of the estate of a bankrupt has been granted under section 38 , the bankrupt shall call a meeting of his creditors before the Court for the purpose of making an offer of composition to them.

(2) At least ten days before the meeting a notice of the meeting specifying the precise offer of composition to be made shall be inserted in Iris Oifigiúil and shall also be sent by post to each creditor at his last known address.

(3) If an offer of composition is made by or on behalf of the bankrupt and three-fifths in number and value of the creditors voting at the meeting, either in person or by an agent authorised in writing in that behalf, accept the offer or any modification of it, it shall be deemed to be accepted, and when approved by the Court shall be binding on all creditors of the bankrupt.

(4) A creditor whose debt is less than £100 shall not be entitled to vote.

(5) If for any reason the bankrupt has not filed a statement of his affairs as required by section 19 (c), he shall do so at or before the meeting.

(6) Debts may be proved at the meeting.

Payment of composition.

(New)

40. —(1) Any composition shall be payable—

(a) in cash, within one month from the approval by the Court of the offer of composition or within such further time as the Court may allow, or

(b) by instalments, all of which shall be secured to the satisfaction of the creditors, or

(c) partly in cash and partly by instalments payable or secured as aforesaid.

(2) In no case shall any instalment be secured by a bill, note or other security signed by or enforceable against the bankrupt alone.

(3) The Court shall have discretion to refuse to approve of an offer payable wholly or partly by instalments if the final instalment is not payable within two years.

Discharge of adjudication order.

(New)

41. —The Court, on the application of the bankrupt or his personal representatives, shall, on the report of the Official Assignee and in the absence of fraud, discharge the adjudication order—

(a) in the case of a composition payable in cash, upon lodgment with the Official Assignee of the necessary amount to pay the composition, expenses, fees, costs, such further sums as the Court may direct and the preferential payments;

(b) in the case of a composition payable by instalments which are secured to the satisfaction of the creditors, upon lodgment with the Official Assignee of the completed bills, notes or other securities, the necessary amount to pay expenses, fees, costs, such further sums as the Court may direct and the preferential payments;

(c) in the case of a composition payable partly in cash and partly by instalments which are secured to the satisfaction of the creditors, upon lodgment with the Official Assignee of the completed bills, notes or other securities, the necessary amount to pay the cash composition, expenses, fees, costs, such further sums as the Court may direct and the preferential payments.

Bankrupt Dying after Adjudication

Bankrupt dying after adjudication.

(1857, s. 137)

42. —If a bankrupt dies the Court may proceed in the bankruptcy as if he were living.

Subsequent Bankruptcy

Subsequent bankruptcy.

(New)

43. —(1) Where a bankrupt is again adjudicated, all after-acquired property unclaimed by the Official Assignee at the date of the subsequent bankruptcy shall, if claimed by the Official Assignee, vest in him for the credit of the subsequent bankruptcy.

(2) Any after-acquired property or the proceeds thereof in the possession of the Official Assignee at the date of the subsequent bankruptcy shall be transferred by the Official Assignee (after deducting his costs and expenses) to the credit of the subsequent bankruptcy.

(3) Any surplus arising on the subsequent bankruptcy shall be transferred to the credit of the former bankruptcy.