Creditor’s petition – initial actions

Part 5 Creditor’s petition – initial actions

January 2012  

4.101 Initial enquiries

On receiving notification of a bankruptcy order made on a petition presented by a creditor, the official receiver should make his/her initial enquiries (defined as the initial contact). The official receiver should consider making those enquiries mentioned in paragraph 4.102 to paragraph 4.106 before contacting the bankrupt. Where possible, initial enquiries and contact with the bankrupt should be made within 24 hours of the office being notified of the order, and if this is not possible, within 48 hours. The initial enquiries should be completed on form IEBC.

 

4.102 Purpose of the initial enquiries

The purpose of the initial enquiries made by the official receiver shortly after the making of the bankruptcy order is to:

  • establish whether there is any continued trading activity and the nature of the assets;
  • to preserve the estate, which includes ensuring that assets are adequately insured, selling, or otherwise disposing, of perishable or other goods likely to fall in value and protecting the estate from possible third party claims where the public could be at risk;
  • to decide, if possible at this stage, whether investigation work is needed;
  • to locate, safeguard and collect books and records relating to the bankrupt’s affairs.

 

4.103 Initial information from third parties

The official receiver, in appropriate bankruptcies, should seek information from third parties, such as  

These enquiries may provide further contact details for the bankrupt and provide valuable information about the affairs of the bankrupt.

 

4.104 Contacting the petitioning creditor’s solicitors

On receiving notice of the bankruptcy order the petitioning creditor’s solicitors should be asked, initially by telephone, whether there are any matters, other than those referred to in the petition, to which the official receiver’s attention should be drawn. The standard letter (PSOL) should be sent out to the petitioner’s solicitors as part of the initial notices. Where HMRC are the petitioning creditor the Petitions and Transfers section will receive a petition pack. The pack will be sent to the appropriate official receiver who should not make any initial contact with HMRC. For further information on the ability of Crown departments to provide information please see paragraph 4.120 and paragraphs 47.79(e), (f) and (g).

 

4.105 Petitioning creditor’s solicitors – information about the bankrupt

The petitioning creditor’s solicitors may be able to provide information on: - 

  • the bankrupt’s telephone number(s);
  • any alternative contact address;
  • how the petition was served, personal or substituted service;
  • whether the bankrupt was a trader;
  • details of any trading addresses (the petitioner may have delivered goods and/or services to these addresses);
  • whether the bankrupt is still trading;
  • the bankrupt’s solicitors or accountants;
  • any possible assets;
  • any bank accounts;
  • any supporting or other creditors, and
  • any previous insolvency proceedings, for example a failed voluntary arrangement or earlier bankruptcy (see paragraphs 4.46 to 4.49).

 

4.106 Petitioning creditor’s solicitors: further information

If the petitioning creditor’s solicitors only have limited details about the bankrupt, they may be able to provide the contact details of an employee of their client able to provide further information referred to in paragraph 4.105.

 

4.107 Contacting the bankrupt

The official receiver must try and make contact with the bankrupt within 24 hours of receiving written notification of the bankruptcy order. If this is not possible the official receiver shall try and make contact with the bankrupt within two working days at the latest. The bankrupt may attend the petition hearing or attend the official receiver’s office after the making of the bankruptcy order thereby allowing contact to take place reasonably quickly. In all other cases the official receiver should try and contact the bankrupt by telephone or, if appropriate, by inspection. The telephone number or numbers could be obtained from the directory enquiries, the internet (access the relevant search engines on the intranet here) or third party sources, for example the petitioning creditor’s solicitors (see paragraphs 4.103 to 4.106).

 

4.108 Information to be obtained from the bankrupt

Where the official receiver contacts the bankrupt he/she should obtain the following information (IEBC): 

  • that he/she is the correct person;
  • whether the bankrupt is trading and an inspection is required (see paragraph 4.109);
  • initial information, including details of any bank or building society accounts (see paragraph 4.139);
  • whether immediate action is required to collect, protect or realise assets;
  • whether the appointment of an insolvency practitioner is required to deal with any onerous property;
  • the location of accounting records, if any, and arrange delivery or collection;
  • the details of any of the relevant parties mentioned in Part 3 to whom notice must be provided immediately or within 24 hours;
  • whether the bankrupt is involved in any former and/or current insolvency proceedings, or any other civil litigation ( see paragraphs 4.64 and 4.65);
  • arrange an appointment for the bankrupt, either at the office or by telephone. In the case of a telephone interview the bankrupt should be asked details of his/her telephone number.

The official receiver should provide contact details of the person dealing with their case, provide any further appropriate information and to answer any questions the bankrupt may have.

 

4.109 Inspection

Where the official receiver has confirmed, or believes, the bankrupt is trading he/she needs to consider carrying out an inspection of the bankrupt's premises. In making the decision the official receiver should consider the nature of the bankrupt's business, for example there may be no need for an inspection where the bankrupt trades from his/her own home and the only business assets are hand tools. An inspection of a non-trading bankrupt's home and/or other premises is not usually required. Following an inspection the official receiver should arrange appropriate insurance cover (see paragraph 4.111). Further details on inspections are contained in Chapter 8.

 

4.110 Trading bankrupt

Where the bankrupt is trading it is imperative that immediate action is taken. In most cases the official receiver will close down the business and dismiss any employees (see paragraph 4.174). See Chapter 76 for further information on employment law. For details on inspecting a trading premises see part 4 of Chapter 8. Any decision to continuing trading should only be made after the official receiver has considered the matters outlined in Chapter 62 and Chapter 2.

 

4.111 Insurance

If the official receiver identifies any assets whilst completing the IECB, after conducting an inspection or at any other stage in the bankruptcy, insurance cover should be arranged in accordance with the instructions contained in Chapter 49, in particular paragraph 49.4. If the asset is subsequently discovered to have no value the cover should be cancelled promptly.

 

4.112 The bankrupt’s initial appointment

(amended February 2014)

The official receiver should send the combined package BKTINITIAL (containing appointment letter NTB1, and forms NTB2, TNIDIS, DPADA and EMF) to the bankrupt requiring his/her attendance upon the official receiver for interview. Whilst there is no deadline by which the interview should take place the official receiver should deal with the bankrupt’s affairs as expeditiously as possible and to ensure that other deadlines, such as the completion of the ISCIS conduct assessment tab and issuing the report to creditors, are met. The appointment should be made whether or not the bankrupt has been contacted.

 

4.113 The initial appointment letter

(amended February 2014)

The combined package BKTINITIAL (containing appointment letter NTB1, and forms NTB2, TNIDIS, DPADA and EMF) fixing the initial appointment should be sent to the bankrupt at the address on the bankruptcy order unless the official receiver has confirmation that he/she resides at a different address.  This letter may be the bankrupt’s first contact with the official receiver.

 

4.114 Documents to be included with the bankrupt’s appointment letter

(amended February 2014)

The following should be included with the appointment letter (NTB1) sent to the bankrupt. 

  • The preliminary information questionnaire (PIQB);
  • a sealed copy of the bankruptcy order, although the order may be served personally if this is more convenient;
  • NTB2 – notice setting out the duties and responsibilities of an undischarged bankrupt;
  • TNIDIS – tax and national insurance disclosure form;
  • Ethnic monitoring form;
  • DPADA – data protection act disclosure authority
  • a customer comment card; and
  • a map showing the location of the official receiver’s office, details of parking facilities and public transport.

The NTB2, TNIDIS, ethnic monitoring form (EMF) and DPADA are contained in the combined package BKTINITIAL.

The appointment letter informs the bankrupt the leaflets a “Guide to Bankruptcy” and the “Insolvency Service Charter”, which explains the expected standards of service, can be downloaded from our website. If the bankrupt requests hard copies these should be provided.

 

4.115 The interview

The official receiver should arrange a face to face interview with the bankrupt except in those instances listed in paragraph 11.43. The interview should be conducted in accordance with the guidance provided in Part 4 of Chapter 11.  

 

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