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Bankruptcy petition
 

 

This is a petition presented to the High Court or county court by a creditor. The creditor must prove: (1) that he is owed £50 or more (creditors may plead jointly to make up this amount); (2) that the debt is a liquidated amount though it need not be immediately payable; (3) that an act of bankruptcy has been committed and that the debt was in existence at that time; (4) that the act of bankruptcy was committed within the previous three months; (5) that the debtor is domiciled in England or has had a dwelling house or place of business in England, cither personally or by means of an agent, within the twelve months preceding the petition. The creditor must act in good faith.

The consequences of such a petition are that the court, if it is satisfied, will make a receiving order, and: (1) the official receiver will become a receiver of the debtor's property (the court may appoint an interim receiver if it thinks fit, pending the receiving order); (2) he will take possession of the debtor's property but not ownership - he does not take ownership until after adjudication; (3) ordinary crcditors will lose all rights except that of pleading in the bankruptcy, thoug secured creditors may generally rely on their security: (4) all actions and proceedings against the property and estate of the debtor arc stayed unless the court says otherwise; (5) a sealed copy of the receiving order is sent to the Official Receiver, who serves a similar copy on the debtor. Notice is given to the Department of Trade and Industry, to the London Gazette, to a local paper and to the Chief Land Registrar.

 

Reference: The Penguin Business Dictionary, 3rd edt.