Bankruptcy Act , 1988

PART I Preliminary and General

1. Short title.

1.—This Act may be cited as the Bankruptcy Act, 1988.

2. Commencement.

2.—This Act shall come into operation on such day not later than 1 January, 1989 as the Minister by order appoints.

3. Interpretation.

3.—F1[(1)] In this Act, unless the context otherwise requires,—

F2["Act of 2010" means theCivil Partnership and Certain Rights and Obligations of Cohabitants Act 2010;]

“adjudication” means adjudication in bankruptcy;

“after-acquired property” has the meaning assigned to it by section 44 (5);

“arrangement” means an arrangement in pursuance of an order for protection under Part IV;

“arranging debtor” means a debtor who has been granted an order for protection under Part IV;

“assignees” means the Official Assignee and the creditors' assignee, if any;

F3["Bankruptcy Inspector" means a person standing appointed for the time being—

(i) to the position of Bankruptcy Inspector in the Office of the Official Assignee in Bankruptcy on the day before the coming into operation ofsection 29of the Courts and Civil Law (Miscellaneous Provisions) Act 2013, or

(ii) toF4[a position]of Bankruptcy Inspector pursuant tosection 12of thePersonal Insolvency Act 2012;]

“bankruptcy summons” has the meaning assigned to it by section 8 (1);

“conveyance”, in relation to land, includes assignment and transfer;

“the Court” means the High Court;

“creditors’ assignee” means a person chosen and appointed as such under section 18 (1);

F5["Debt Settlement Arrangement" has the same meaning as in the Personal Insolvency Act 2012;]

F6["Director" means the Director of the Insolvency Service;]

F7["insolvency proceedings" means insolvency proceedings opened in a member state under Article 3 of the Insolvency Regulation where the debtor or each debtor is an individual or deceased;

"Insolvency Regulation" means Council Regulation (EC) No. 1346/2000 of 29 May 2000^1on insolvency proceedings;]

“land” includes any estate or interest in or charge over land;

F7["liquidator" means a liquidator appointed in insolvency proceedings;]

F7["member state" means a member state of the European Communities other than the State and Denmark;]

“the Minister” means the Minister for Justice;

F3["Official Assignee" means a person standing appointed for the time being—

(i) to the position of Official Assignee in Bankruptcy in the Office of the Official Assignee in Bankruptcy on the day before the coming into operation ofsection 29of the Courts and Civil Law (Miscellaneous Provisions) Act 2013, or

(ii) to the position of Official Assignee pursuant tosection 12of thePersonal Insolvency Act 2012;]

F2["periodic payments order" has the same meaning as it has in Part IVB of theCivil Liability Act 1961;]

F5["Personal Insolvency Arrangement" has the same meaning as it has in the Personal Insolvency Act 2012;]

“prescribed”, except in relation to court fees, means prescribed by rules of court;

F8["principal private residence" has the same meaning as it has insection 2of thePersonal Insolvency Act 2012subject to the modification that a reference to the debtor shall be taken to be a reference to the bankrupt;]

F9["property"—

(a) includes money, goods, things in action, land and every description of property, whether real or personal,

(b) includes obligations, easements and every description of estate, interest, and profit, present or future, vested or contingent, arising out of or incident to property,

(c) in relation to proceedings opened in the State under Article 3(1) of the Insolvency Regulation, includes property situated outside the State, and

(d) in relation to proceedings so opened under Article 3(2) of the Regulation, does not include property so situated;]

“registered”, in relation to land, means registered in the Registry of Deeds or the Land Registry, as may be appropriate;

“secured creditor” means any creditor holding any mortgage, charge or lien on the debtor's estate or any part thereof as security for a debt due to him;

F5["statement of affairs" means a statement of the debtor’s or bankrupt’s affairs in the form specified in rules of court;]

F5["trustee" means a person appointed as trustee underPart V;]

“vesting arrangement” has the meaning assigned to it by section 93 (2).

F10[(2)Parts II,III,IV(in so far as it relates to vesting arrangements),V,VIandVIIIand theFirst Scheduleare subject to Chapters I (general provisions) and III (secondary insolvency proceedings) of the Insolvency Regulation.]

4. Application of Act to subsisting bankruptcies and arrangements.

4.—(1)Save where otherwise provided in this Act, a bankruptcy or arrangement subsisting at the commencement of this Act shall thereafter be administered according to the provisions of this Act and the rules thereunder, without prejudice to the validity of anything duly done or suffered before such commencement.

(2)The provisions of this Act and the rules shall apply accordingly, so far as they are capable of application and subject to such modifications and adaptations as may be appropriate, as if the bankrupt had been adjudicated or the arranging debtor had been granted an order for protection under this Act.

5. Expenses.

5.—The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas.

6. Repeals.

6.—(1)The enactments mentioned in the Second Schedule are hereby repealed to the extent mentioned in the third column of that Schedule.

(2)Any petition, summons, subpoena, order, direction, notice or other instrument presented, served, made or issued under a repealed enactment and in force at the commencement of this Act shall continue in force and be treated thereafter as if it had been presented, served, made or issued under this Act.

PART II Procedure in Bankruptcy

7. 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;

F11[(ca) the individual has been subject as a debtor to a Debt Settlement Arrangement which has been terminated under section 83 of the Personal Insolvency Act 2012;

(cb) the individual has been subject as a debtor to a Debt Settlement Arrangement which under section 84 of the Personal Insolvency Act 2012 is deemed to have failed;

(cc) the individual has been subject as a debtor to a Personal Insolvency Arrangement which has been terminated under section 122 of the Personal Insolvency Act 2012;

(cd) the individual has been subject as a debtor to a Personal Insolvency Arrangement which under section 123 of the Personal Insolvency Act 2012 is deemed to have failed;]

(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.

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

8.—F12[(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 more than€20,000 is due to the creditor concerned by the person against whom the summons is sought,

(b) the debt is a liquidated sum, and

(c) the creditor concerned has given not less than 14 days’F13[notice in the prescribed form to the debtor]of the creditor’s intention to apply for a bankruptcy summons and the debt remains unpaid.]

(2)A bankruptcy summons may be granted to two or more creditors who are not partners and whose debts amount together to F14[more than€20,000] 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 F13[within 14 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.

9. 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.

10. Petition. (1857, s. 116 in pt.)

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

11. 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) F15[amounts to more than€20,000],

(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)

F17[(d) (i) the debtor’s centre of main interests is situated in the State,

(ii) the debtor’s centre of main interests is situated in another member state and the debtor has an establishment within the State, or

(iii) the Insolvency Regulation^1does not apply to the proceedings, and the debtor (whether an Irish citizen or not)—

(I) is domiciled in the State, or

(II) within 3 years before the date of the presentation of the petition—

(A) has ordinarily resided or had a dwelling-house or place of business in the State,

(B) has carried on business in the State personally or by means of an agent or manager, or

(C) 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)

F18[(3) Subject tosubsections (4)and(5)a debtor may petition for adjudication against himself.

(4) A debtor may not present a petition for adjudication unless the petition is accompanied by an affidavit sworn by the debtor that he has, prior to presenting the petition, made reasonable efforts to reach an appropriate arrangement with his creditors relating to his debts by making a proposal for a Debt Settlement Arrangement or a Personal Insolvency Arrangement to the extent that the circumstances of the debtor would permit him to enter into such an arrangement.

(5) A debtor may not present a petition for adjudication unless the petition is accompanied by a statement of affairs and such statement of affairs discloses that the debts of the debtor exceed the assets of the debtor by any amount greater than€20,000.]

F19[(6) For the purposes of this section, "centre of main interests" shall be construed in accordance with the Insolvency Regulation.]

12. F20[Petitioning creditor’s costs.

12.—F21[(1) The petitioning creditor shall at his own cost present his petition and prosecute it and, subject tosubsection (2), the Court shall, at or after the hearing of the creditors’petition under section 14, 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.]

(2) In considering whether it is appropriate to make an order under subsection (1) the Court shall have regard to whether or not the petitioning creditor had unreasonably refused to accept proposals made in connection with a proposal for a Debt Settlement Arrangement or a Personal Insolvency Arrangement pursuant to the Personal Insolvency Act 2012.]

13. 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.

14. F22[Adjudication: creditor’s petition.

14.—(1) Subject tosubsection (2), where the petition is presented by a creditor, the Court shall, if satisfied that the requirements ofsection 11(1)have been complied with, by order adjudicate the debtor bankrupt.

(2) Before making an order undersubsection (1), the Court shall consider the nature and value of the assets available to the debtor, the extent of his liabilities, and whether the debtor’s inability to meet his engagements could, having regard to those matters and the contents of any statement of affairs of the debtor filed with the Court, be more appropriately dealt with by means of—

(a) a Debt Settlement Arrangement, or

(b) a Personal Insolvency Arrangement,

and where the Court forms such an opinion the Court may adjourn the hearing of the petition to allow the debtor an opportunity to enter into such of those arrangements as is specified by the Court in adjourning the hearing.

(3) 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.

(4) For the purposes ofsubsection (2), the Court may order the bankrupt to attend and make full disclosure of his assets and liabilities to the Court by way of a statement of affairs filed with the Court.]

15. F23[Adjudication on debtor’s petition.

15.—(1) Subject tosubsection (2), where the petition for adjudication is presented by the debtor the Court may, where it considers it appropriate to do so, and where it is satisfied that the debtor is unable to meet his engagements with his creditors and that the requirements ofsection 11(4)and(5)have been complied with, by order adjudicate the debtor a bankrupt.

(2) Before making an order undersubsection (1), the Court shall consider the nature and value of the assets available to the debtor, the extent of his liabilities, and whether the debtor’s inability to meet his engagements could, having regard to those matters and the contents of the debtor’s statement of affairs filed with the Court, be more appropriately dealt with by means of—

(a) a Debt Settlement Arrangement, or

(b) a Personal Insolvency Arrangement,

and where the Court forms such an opinion the court may adjourn the hearing of the petition to allow the debtor an opportunity to enter into such of those arrangements as is specified by the Court in adjourning the hearing.]

16. 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.