Initial actions on the making of a bankruptcy order
The Case Help Manual provides a detailed explanation of what initially needs to be done upon the making of a bankruptcy order on a debtor’s petition (Initial Contact in Debtor’s Petition cases) and on the making of an order on a creditor’s petition (Initial Enquiries in Creditor’s Petition Bankruptcy and Company cases). Additional information can be obtained from Chapter 4 of the Technical Manual.
In all cases where the petition was presented before 6 April 2009, the official receiver is required to arrange for the bankruptcy order to be gazetted and advertised. Where the petition was presented on or after 6 April 2009, the official receiver must arrange for the bankruptcy order to be gazetted, however, he/she has discretion on whether, and if so how, to advertise (see Chapter 5 for more information on Gazetting and advertising).
The official receiver must send notice of the bankruptcy order to the Chief Land Registrar so that it may be entered in the register of writs and orders, unless the Court orders otherwise, (for further information see paragraphs 4.60 and 50.27 to 50.29).
On the making of a bankruptcy order the official receiver, as receiver and manager, is under a duty to protect the estate until a trustee is appointed [Note 1]. The official receiver’s initial actions are to identify the estate and to take the appropriate steps to protect it pending the appointment of a trustee. How this is achieved depends upon the type of petition and the individual circumstances of each case.
On the making of a bankruptcy order the official receiver will contact the bankrupt and complete the initial contact form (ICON). In completing the ICON, the official receiver must, amongst other things, whether the bankrupt is trading or has recently ceased trading, whether there are any assets in jeopardy that need to be dealt with within the next 7 days and whether there are any other matters that require urgent attention. The completed ICON and the statement of affairs, when received, are then passed to an examiner for review.
Where the official receiver has determined that the bankrupt is trading or has recently ceased trading consideration should be given to immediately allocating the case to the appropriate examiner. The examiner will then ask additional questions relating to the bankrupt’s trading and record his/her answers and decide whether an inspection is required (see paragraph 24.23). The examiner should identify and deal with any assets that are perishable or likely to diminish in value (see Paragraphs 24.36, 24.37 and 24.43).
Within two days of the receipt of the statement of affairs the examiner will review the ICON together with the other case papers and decide whether a further interview is required. The examiner should identify any assets
that are perishable, likely to diminish in value or at risk. If there are assets that require attention or are at risk the examiner should decide whether an inspection is required (see paragraph 24.23).
Once the official receiver has received notification of the bankruptcy order enquiries into the affairs of the bankrupt should be completed within 24 hours of the office being notified of the order, or certainly within 48 hours. All initial enquiries on creditor petition cases should be undertaken by the appropriate examiner. Paragraph 4.27 sets out the nature of these enquiries, which include whether the bankrupt is trading and what measures are necessary to protect the estate.
On the making of the bankruptcy order, the examiner should decide whether to carry out an inspection of the bankrupt’s premises. This decision should be informed by the circumstances listed in paragraph 8.8. Where an inspection is completed an inventory should be taken (see paragraph 8.63). In certain cases, see paragraph 8.12, an agent may be employed to carry out the inspection and/or inventory.
In Type 0 cases the examiner will be satisfied that he/she has identified all the bankrupt’s assets, determined which, if any, are perishable or likely to fall in value, identified any possible third party claims where the public may be at risk and have sufficient information to protect the estate (see Part 4 and Part 5) [Note 2].
In all other cases the examiner should ensure that he/she obtains sufficient information to fulfil the official receiver’s statutory duty to protect the bankrupt’s estate pending the appointment of a trustee. Amongst other things this involves identifying all the bankrupt’s assets, determining which, if any, are perishable or likely to fall in value and identifying any possible third party claims where the public may be at risk (see Part 4 and Part 5).
The bankrupt has a statutory duty to deliver possession of his/her estate to the official receiver, including books, papers and other records relating to his/her case [Note 3]. If any part of the bankrupt’s property cannot be delivered to the official receiver the bankrupt is required to do all things as may reasonably required by the official receiver for the protection of that property [Note 4].
After the making of the bankruptcy order the bankrupt is unable to deal with, sell or otherwise dispose of any property comprised in his/her estate without the consent or approval of the court [Note 5]. In telephone interviews the bankrupt is made aware of these restrictions when he/she reads, signs, dates and returns the form NTB 2. In face to face interviews the bankrupt ‘s attention should be drawn to the restrictions before he/she reads and signs the form NTB 2.