BANKRUPTCY ACT, 1988

AN ACT TO CONSOLIDATE WITH AMENDMENTS THE LAW RELATING TO BANKRUPTCY AND TO PROVIDE FOR RELATED MATTERS. [13th July, 1988]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

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 the Civil 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 of section 29 of the Courts and Civil Law (Miscellaneous Provisions) Act 2013, or

• (ii) to F4[a position] of Bankruptcy Inspector pursuant to section 12 of the Personal 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 2000¹ on 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 of section 29 of the Courts and Civil Law (Miscellaneous Provisions) Act 2013, or

• (ii) to the position of Official Assignee pursuant to section 12 of the Personal Insolvency Act 2012;]

F2["periodic payments order" has the same meaning as it has in Part IVB of the Civil 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 in section 2 of the Personal Insolvency Act 2012 subject 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 under Part 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, VI and VIII and the First Schedule are 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 Regulation¹ does 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 to subsections (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 to subsection (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 to subsection (2), 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.

• (2) Before making an order under subsection (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 of subsection (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 to subsection (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 of section 11(4) and (5) have been complied with, by order adjudicate the debtor a bankrupt.

• (2) Before making an order under subsection (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.

• (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.

17. 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.

• F24[(2) The Court shall cause notice of the adjudication to be given as soon as may be by the publication of the notice on the website of the Insolvency Service of Ireland.]

• (3) F25[…]

• (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.

18. Creditors' assignee. (1857, ss. 64, 265)

F26[18.—(1) The creditors of a bankrupt may—

• (a) 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, and

• (b) not later than 90 days after the date of the making of the adjudication order in respect of that bankruptcy apply to Court for confirmation of that appointment.]

• (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.

18A. F27[Revenue Commissioners to furnish certain information to Official Assignee.

18A.— (1) Where a person has been adjudicated bankrupt the Revenue Commissioners shall, where requested to do so by the Official Assignee, furnish to the Official Assignee such information as has been requested held by them in relation to the carrying on of any trade or profession or relating to any matter in respect of which a return is required to be made to the Revenue Commissioners and to which the bankrupt is or was a party.

• (2) The information to be provided under subsection (1) shall also be provided to a trustee in bankruptcy other than the Official Assignee appointed under Part V.]

19. 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 F28[such books of account, other papers or records (including copies of such books of account, other papers or records held in electronic form)] 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.

20. 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.

21. 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.

• F29[(3) The Court may require him to produce any books of account, other papers or records (including copies of such books of account, other papers or records held in electronic form) in his possession or control relating to the matters aforesaid but, where he claims any lien on books, papers or records 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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

38. 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.

39. Offer of composition. (cf. 1857, ss. 149, 150 in pt.; 1872, s. 61)

39.—F30[(1) Where a stay on the realisation of the estate of the bankrupt has been granted under section 38 or where the Official Assignee has otherwise consented in writing to suspend the realisation of the bankrupt’s estate on such terms as he may specify in such consent, 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.

• F30[(4) A creditor whose debt is less than €500 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.

40. 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.

41. 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

42. 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

43. 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.

PART III Administration of Property

Effect of Adjudication on Bankrupt's Property

44. Vesting of property in Official Assignee. (1857, ss. 267, 268, 273)

44.—(1) Where a person is adjudicated bankrupt, then, subject to the provisions of this Act, all property belonging to that person shall on the date of adjudication vest in the Official Assignee for the benefit of the creditors of the bankrupt.

• (2) Subject to the provisions of this Act, the title of the Official Assignee to any property which vests in him by virtue of subsection (1) shall not commence at any date earlier than the date of adjudication.

• (3) The property to which subsection (1) applies includes—

• (a) all powers vested in the bankrupt which he might legally exercise in relation to any property immediately before the date of adjudication;

• (b) all property which was the subject of any conveyance or transfer which sections 57, 58 and 59 declare void as against the Official Assignee, subject to the rights of any persons which are preserved F31[by those sections; and]

• F32[(c) any sum paid to the bankrupt under a periodic payments order, which relates to damages in respect of future loss of earnings.]

• (4) The property to which subsection (1) applies does not include—

• (a) property held by the bankrupt in trust for any other person, F33[…]

• (b) any sum which vests in the Official Assignee under [F34section 52(1) of the Property Services (Regulation) Act 2011], or section 30 (i) of the [F35Central Bank Act 1971, and]

• F32[(c) any sum paid to the bankrupt under a periodic payments order, other than a sum referred to in subsection (3)(c).]

• (5) Without prejudice to any existing principle or rule of law or equity, established practice or procedure in relation to damages or compensation recovered or recoverable by a bankrupt for personal injury or loss suffered by him, property which is acquired by or devolves on a bankrupt before the discharge or annulment of the adjudication order (in this Act called “after-acquired property”) shall vest in the Official Assignee if and when he claims it.

• F32[(6) Subsection (5) shall not apply to any sum paid to a bankrupt under a periodic payments order before the discharge or annulment of the adjudication order, other than any part of such sum which relates to damages in respect of future loss of earnings.]

44A. F36[Pensions in Bankruptcy.

44A.— (1) Subject to subsection (2), where a person is adjudicated bankrupt, and he or she is, or may become entitled to, payments under a relevant pension arrangement, assets relating to the arrangement (other than payments already received by the bankrupt, or that the bankrupt was entitled to receive, under the arrangement) shall not vest in the Official Assignee for the benefit of the creditors of the bankrupt.

• (2) Where a bankrupt has an interest in or entitlement under a relevant pension arrangement which would, if the bankrupt performed an act or exercised an option, cause that debtor to receive from or at the request of the person administering that relevant pension arrangement—

• (a) an income, or

• (b) an amount of money other than income,

in accordance with the relevant provisions of the Taxes Consolidation Act 1997, that bankrupt shall be considered as being in receipt of such income, and such amount of money shall vest in the Official Assignee or the trustee in bankruptcy.

• (3) Subsection (2) applies where—

• (a) the bankrupt is entitled at the date of being adjudicated a bankrupt to perform the act or exercise the option referred to in subsection (2),

• (b) was entitled at any time before the date of the adjudication, to perform the act or exercise the option referred to in subsection (2), but had not performed the act or exercised the option, or

• (c) will become entitled within 5 years of the date of the adjudication to perform the act or exercise the option referred to in subsection (2).

• (4) Where subsection (2) applies, the Official Assignee or the trustee in bankruptcy may where he or she considers that it would be beneficial to the creditors of the bankrupt to do so, perform an act or exercise an option referred to in subsection (2) in place of the bankrupt.

• (5) In this section and in sections 44B and 85D a reference to a relevant pension arrangement means:

• (a) a retirement benefits scheme, within the meaning of section 771 of the Taxes Consolidation Act 1997, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1 of Part 30 of that Act;

• (b) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784 of the Taxes Consolidation Act 1997;

• (c) a PRSA contract, within the meaning of section 787A of the Taxes Consolidation Act 1997, in respect of a PRSA product, within the meaning of that section;

• (d) a qualifying overseas pension plan within the meaning of section 787M of the Taxes Consolidation Act 1997;

• (e) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004;

• (f) a statutory scheme, within the meaning of section 770(1) of the Taxes Consolidation Act 1997, other than a public service pension scheme referred to in paragraph (e);

• (g) such other pension arrangement as may be prescribed by the Minister, following consultation with the Ministers for Finance, Social Protection and Public Expenditure and Reform.]

44B. F37[Excessive pension contributions by bankrupt.

44B.— (1) Where, on application by the Official Assignee or the trustee in bankruptcy, the Court is satisfied that the bankrupt, or a person on his or her behalf, has within the 3 years prior to the adjudication made contributions to a relevant pension arrangement under which the bankrupt is, or may become entitled to, payments and which contributions—

• (a) were excessive in view of the bankrupt’s financial circumstances when those contributions were made, and

• (b) had the effect of—

• (i) materially contributing to the bankrupt’s inability to pay his or her debts, or

• (ii) substantially reducing the sum available for distribution to the creditors,

the Court may make such order in relation to the relevant pension arrangement as it considers appropriate for the purpose of ensuring that the contributions which the Court considers to be excessive or any part of such contributions can be vested in the Official Assignee or the trustee in bankruptcy to be made available for distribution to the creditors.

• (2) In considering an application under subsection (1) and in determining whether or not the contributions made by the bankrupt to a relevant pension arrangement were excessive the Court may have regard to all the financial circumstances of the bankrupt and in particular:

• (a) whether the bankrupt made payments to his or her creditors in respect of debts due to those creditors on a timely basis at or about the time when the bankrupt made the contribution concerned;

• (b) whether the bankrupt was obliged to make contributions of the amount or percentage of income as the payments actually made under his or her terms and conditions of employment and if so obliged, whether the bankrupt or a person who as respects the bankrupt is a relative could have materially influenced the creation of such obligation;

• (c) the amount of the contributions paid, including the percentage of total income of the bankrupt in each tax year concerned which such contributions represent;

• (d) the amount of the contributions paid, in each of the 6 years prior to the making of the adjudication including the percentage of total income of the bankrupt which such contributions represent in each of those years;

• (e) the age of the bankrupt at the relevant times;

• (f) the percentage limits which applied to the bankrupt in relation to relief from income tax for the purposes of making contributions to a relevant pension arrangement in each of the 6 years prior to the adjudication; and

• (g) the extent of provision made by the bankrupt in relation to any relevant pension arrangement prior to the making of the contributions concerned.

• (3) In this section “relative” as respects a person, means a brother, sister, parent, spouse or civil partner of the person or a child of the person or of the spouse or civil partner.]

45. Excepted articles. (1857, ss. 298, 299)

45.—F38[(1) (a) Subject to paragraph (b), a bankrupt shall be entitled to retain as excepted articles—

• (i) any assistive technology or other aids and appliances associated with the medical treatment and care of the bankrupt, his or her spouse or civil partner within the meaning of the Act of 2010, his or her children and any dependent relative residing with him or her, and

• (ii) such articles of clothing, household furniture, bedding, tools or equipment of the bankrupt’s trade or occupation or other like necessaries for the bankrupt, his or her spouse or civil partner within the meaning of the Act of 2010, his or her children and any dependent relatives residing with him or her, as the bankrupt may select.

• (b) The total value of articles selected by a bankrupt under paragraph (a)(ii) shall not exceed €6,000 or such further amount as the Court may, on an application by the bankrupt, allow.]

• (2) Where a bankrupt, after selecting the items constituting the excepted articles, requests the Official Assignee, in writing, not to dispose of the remainder of any such articles as are referred to in F38[subsection (1)(a)(ii)] the Official Assignee shall not dispose thereof except in accordance with an order of the Court.

• (3) The Court may, on the application of the bankrupt or the Official Assignee, in relation to the remainder of such articles—

• (a) postpone the removal and sale thereof;

• (b) permit them to remain in the use of the bankrupt;

• (c) at any time, order them to be taken by or on behalf of the Official Assignee and to be sold for the benefit of the creditors.

46. Certificate of vesting of property in Official Assignee. (cf. 1857, s. 269)

46.—(1) Where, according to law, any conveyance of land is required to be registered and such land vests in the Official Assignee under this Part, a certificate under the seal of the Court shall be issued to him as evidence of the vesting and he shall cause the certificate to be registered as soon as may be as if it were a conveyance, and registration of the certificate shall have the like effect to all intents and purposes as registration of a conveyance would have had.

• (2) The title of any purchaser of any such land for valuable consideration, in good faith and without notice of the adjudication, who had duly registered the conveyance before the registration of the certificate shall not be invalidated by reason of the adjudication unless the certificate is registered within two months after the date of the adjudication.

47. Vesting in Official Assignee of certain money and securities. (New)

47.—F39[(1)] F40[Subject to subsection (2), notwithstanding] any provision in any other enactment—

• (a) money in the Post Office Savings Bank or in a trustee savings bank to which a bankrupt is entitled, or

• (b) securities issued through An Post by the Minister for Finance under his statutory borrowing powers and to which a bankrupt is entitled,

shall, on the adjudication of the bankrupt, vest in the Official Assignee in the same manner as any other property.

• F39[(2) Money or securities referred to in subsection (1), which derive from—

• (a) payments to a bankrupt, before or after adjudication, made under a periodic payments order, other than any part of such payments which relates to damages in respect of future loss of earnings, or

• (b) damages or compensation otherwise paid to a bankrupt, before or after adjudication, for a personal injury or loss suffered by him or her, other than any part of such damages or compensation which relates to damages in respect of future loss of earnings,

shall not vest in the Official Assignee.]

48. Limitation of Official Assignee’s powers in relation to copyright. (New)

48.—Where the property of a bankrupt comprises the copyright in any work or any interest in such copyright and he is liable to pay to the author royalties or a share of the profits in respect thereof—

• (a) the Official Assignee shall not be entitled to sell or authorise the sale of any copies of the work, or to perform or authorise the performance of the work, except on the terms of paying to the author such sums by way of royalty or share of the profits as would have been payable by the bankrupt, and

• (b) he shall not be entitled to assign the right or transfer the interest or to grant any interest in the right by licence, except with the consent of the author or of the Court and upon terms which will secure to the author payments by way of royalty or share of the profits at a rate not less than that which the bankrupt was liable to pay.

49. Restrictive clause in agreement or lease. (New)

49.—(1) Every covenant or provision for forfeiture of a lease on the bankruptcy of the lessee shall be void as against the Official Assignee.

• (2) A clause in a hire purchase agreement which purports to terminate the agreement on the bankruptcy of the hirer shall be void as against the Official Assignee.

50. Execution against debtor’s property before adjudication. (cf. 1872, s. 54)

50.—(1) Where goods F41[…] belonging to a debtor have been seized under an execution order and sold, or where money has been paid in part or full satisfaction of the execution either to the sheriff or county registrar or to the execution creditor in order to avoid seizure or sale under such execution, the sheriff, county registrar or execution creditor shall retain the proceeds of sale or the money so paid, for a period of twenty-one days.

• (2) If within that period the sheriff, county registrar or execution creditor receives notice of the adjudication of the debtor, he shall surrender the property, or pay over the proceeds of sale thereof or any money paid in satisfaction of the execution, to the Official Assignee who shall be entitled to retain the property, proceeds or money, as the case may be, as against the execution creditor.

• (3) An execution levied by seizure of any such property belonging to the debtor shall not be invalid by reason only of its being an act of bankruptcy and a person who purchases the property in good faith under a sale by the sheriff or county registrar shall, as against the Official Assignee, acquire a good title thereto.

• (4) Where a sheriff or county registrar, without notice of the adjudication of the debtor, pays the proceeds of sale or other money retained by him pursuant to subsection (1) to the execution creditor after the expiration of twenty-one days, he shall not be liable to the Official Assignee in respect of the payment.

• (5) Where property is surrendered or proceeds of sale or other money paid over to the Official Assignee, the costs of the execution shall be a first charge thereon and the Official Assignee may sell the whole or part of the property for the purpose of satisfying the charge.

51. Priority of judgment mortgage. (1857, s. 331)

51.—F42[(1) A judgment creditor who registers a judgment mortgage under section 116 of the Land and Conveyancing Law Reform Act 2009 shall not, by reason of such registration, be entitled to any priority or preference over simple contract creditors in the event of the person against whom such judgment mortgage is registered being adjudicated bankrupt, unless the judgment mortgage is registered at least three months before the date of the adjudication.]

• (2) F43[…]

52. Order to put purchaser in possession. (1872, s. 75)

52.—Where land belonging to a bankrupt or arranging debtor has been sold under the provisions of this Act or by or under the direction of the Court, the Court may, on the application of the purchaser, issue an order directing the appropriate sheriff or county registrar to put the purchaser into possession of all the land not in the occupation of lessees, under-lessees or tenants, subject to whose interests the sale has been made and who have attorned to the purchaser within a time to be limited in the order, and the order shall be executed in like manner as an order for the delivery of possession.

53. Permission to mortgagee to bid at sale. (1857, s. 316)

53.—The mortgagee of any property of a bankrupt or arranging debtor may, with the leave of the Court, bid and purchase at the sale of the property.

54. Discharge of persons delivering property, etc., to Official Assignee. (cf. 1857, s.281)

54.—A person—

• (a) from whom the Official Assignee recovers any property of a bankrupt, or

• (b) who, without legal proceedings, in good faith delivers up to the Official Assignee possession of any such property, or

• (c) who pays any debt owed to a bankrupt and claimed by the Official Assignee,

shall, notwithstanding that the adjudication is subsequently annulled or discharged, be released from all claims by the bankrupt in respect of such property or debt.

55. Title to property sold not to be invalidated. (1857, s. 323)

55.—The title to any property sold in bankruptcy shall not be invalidated by the bankrupt or any person claiming under him by reason only of any defect in any proceedings under this Act.

56. Disclaimer of onerous property. (1872, ss. 97 and 98; 33/1963, s. 290)

F44[56.—(1) Subject to subsection (5), where any of the property (other than after- acquired property) of a bankrupt consists of—

• (a) any unprofitable contract, or

• (b) any other property which—

• (i) is unsaleable,

• (ii) is not readily saleable for any reason whatsoever (including because the property is subject to any mortgage, charge, lien or other security), or

• (iii) gives rise to a liability to pay money or perform any other onerous act,

the Official Assignee, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, F45[…] subject to the provisions of this section, by writing signed by him, at any time disclaim the property.]

• F46[(1A) The Official Assignee shall give notice in writing of the disclaimer to each person who, to the Official Assignee’s knowledge at the time of the disclaimer—

• (a) has an interest in the disclaimed property (including any person who is in occupation of, or claims a right to occupy, the property as that person’s principal private residence, as defined in section 2 of the Personal Insolvency Act 2012, subject to the modification that a reference to the debtor shall be taken as a reference to that person), or

• (b) is under a liability not discharged by this Act in respect of the disclaimed property.]

• (2) F47[…]

• (3) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests and liabilities of the bankrupt and his property in or in respect of the property disclaimed, and shall also discharge the Official Assignee from all personal liability in respect of the property disclaimed as from the date when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the Official Assignee from liability, affect the rights or liabilities of any other person.

• F48[(4) The Court may, on application by—

• (a) the Official Assignee, at any time, or

• (b) any person to whom subsection (1A) applies, before the end of the period of 28 days beginning on the day on which notice was given,

give such directions and make such other order in the matter as the Court thinks just.]

• (5) The Official Assignee shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether he will or will not disclaim, and the Official Assignee has not, within a period of twenty-eight days after the receipt of the application or such further period as may be allowed by the Court, given notice to the applicant that he intends to apply to the Court for leave to disclaim; and, in the case of a contract, if the Official Assignee, after such application as aforesaid, does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

• (6) The Court may, on the application of any person who is, as against the Official Assignee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the Court thinks just, and any damages payable under the order to any such person shall be deemed to be a debt proved and admitted in the bankruptcy.

• (7) Subject to subsection (8), the Court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this Act in respect of any disclaimed property and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any person entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the Court may think just, and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose.

• (8) Where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the bankrupt, whether as under-lessee or as mortgagee by demise, except upon the terms of making that person—

• (a) subject to the same liabilities and obligations as those to which the bankrupt was subject under the lease in respect of the property at the date of the adjudication; or

• (b) if the Court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date;

and in either event (if the case so requires), as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property and, if there is no person claiming under the bankrupt who is willing to accept an order upon such terms, the Court shall have power to vest the estate and interest of the bankrupt in the property in any person liable either personally or in a representative character, and either alone or jointly with the bankrupt, to perform the lessee’s covenants in the lease, freed and discharged from all estates, encumbrances and interests created therein by the bankrupt.

• (9) Any person damaged by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the amount of the damages, and may accordingly prove the amount as a debt in the bankruptcy.

Fraudulent and Voluntary Conveyances

57. Avoidance of fraudulent preferences. (1872, s. 53; 33/1963, sch. 11, para. 1.)

57.—(1) Every conveyance or transfer of property or charge made thereon, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor or of any person in trust for any creditor, with a view to giving such creditor, or any surety or guarantor for the debt due to such creditor, a preference over the other creditors, shall, F49[if the person making, incurring, taking or suffering the same is adjudicated bankrupt within F50[3 years] after the date of the making], incurring, taking or suffering the same, be deemed fraudulent and void as against the Official Assignee; but this section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the bankrupt.

• (2)
• (a) Where a person is adjudicated bankrupt and anything made or done is void under subsection (1) or was void under the corresponding provisions of the law in force immediately before the commencement of this Act as a fraudulent preference of a person interested in property mortgaged or charged to secure the bankrupt’s debt, then (without prejudice to any rights or liabilities arising apart from this section) the person preferred shall be subject to the same liabilities and shall have the same rights as if he had undertaken to be personally liable as surety for the debt to the extent of the charge on the property or the value of his interest, whichever is the less.

• (b) The value of the said person’s interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all encumbrances other than those to which the charge for the bankrupt’s debt was then subject.

• (c) On any application made to the Court in relation to any payment on the ground that the payment was a fraudulent preference of a surety or guarantor, the Court shall have jurisdiction to determine any questions relating to the payment arising between the person to whom the payment was made and the surety or guarantor, and to grant relief in respect thereof notwithstanding that it is not necessary so to do for the purposes of the bankruptcy, and for that purpose may give leave to bring in the surety or guarantor as a third party as in the case of an action for the recovery of the sum paid.

• (d) Paragraph (c) shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies to payments.

58. Avoidance of certain transactions. (New)

58.—(1) F51[If within F52[3 years]] before he is adjudicated bankrupt a debtor commits an act of bankruptcy and thereafter either sells any of his property at a price which, in the opinion of the Court, is substantially below its market value or enters into or is a party to any other transaction which, in the opinion of the Court, has the effect of substantially reducing the sum available for distribution to the creditors, such transaction shall be void as against the Official Assignee, unless the transaction was bona fide entered into and the other party had not at the time of the transaction notice of any prior act of bankruptcy committed by the bankrupt.

• (2) Subsection (1) shall not affect the rights of any person making title in good faith and for valuable consideration through or under a person (other than the bankrupt) who is party to a transaction mentioned therein.

• (3) Subsection (1) shall not apply to any transaction mentioned in section 57(1) or 59.

59. Avoidance of certain settlements. (1857, s. 314; 1872, s. 52)

59.—(1) Any settlement of property, not being a settlement made before and in consideration of marriage F53[or civil partnership within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010], or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, shall—

• (a) if the settlor is adjudicated bankrupt within F54[3 years] after the date of the settlement, be void as against the Official Assignee, and

• (b) if the settlor is adjudicated bankrupt at any subsequent time within five years after the date of the settlement, be void as against the Official Assignee unless the parties claiming under the settlement prove that the settlor was, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in the settlement and that the interest of the settlor in such property passed to the trustee of such settlement on the execution thereof.