Acts of bankruptcy, Financial Accounting

ACTS OF BANKRUPTCY

The following are the acts of bankruptcy on which a petition may be founded:

(a) Assignment of property to trustee:  whereby one gives up all his property to be managed by a trustee provided that:

  • The assignment is of substantially the whole of the debtor's property, and
  • It is for the benefit of the creditors generally.


Such an assignment will normally be void unless registered as a deed of arrangement.

(b) Fraudulent conveyance: the debtor unfairly transfers his property to one creditor, so that the other creditors have no assets to attach their claims on.

i.e. a transfer of any property to any person which gives one creditor an unfair advantage, or which tends to defeat or delay  creditors.

(c) Fraudulent preference: Where the preference constitutes a conveyance or transfer of property, or a charge thereon,

(d) Absenting: That is, departing or remaining out of the country, or departing from his dwelling-house, or otherwise absenting himself, or 'keeping house', with the intention of defeating or delaying his creditors.

(e) Execution against goods: This is committed when the bailiff has taken possession of goods and either sold them or retained them for 21 days.

(f) Petition by debtor: A bankruptcy petition by the debtor against himself, or a formal declaration of his inability to pay his debts filed with the court, operates as an act of bankruptcy.

(g) Non-compliance with bankruptcy notice: A bankruptcy notice may be issued by a judgement creditor in respect of a final judgment or order for any amount provided that execution has not been stayed or already levied: failure by the debtor to pay the amount of the judgment within seven days of service of the notice constitutes an act of bankruptcy, unless the debtor applies to have it set aside on the grounds of set off, etc.

(h) Notice of suspension of payment of debts: This may be in any form provided it shows a clear intention to suspend payment.

Posted Date: 12/12/2012 5:55:37 AM | Location : United States







Related Discussions:- Acts of bankruptcy, Assignment Help, Ask Question on Acts of bankruptcy, Get Answer, Expert's Help, Acts of bankruptcy Discussions

Write discussion on Acts of bankruptcy
Your posts are moderated
Related Questions
conduct a-what-if-analysis

Format of the Balance Sheet It shows the financial position of the company as at the end of a given financial period. The standard requires that assets and liabilities should b

The common stock of the PP Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out that range in the next 3 mont

Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 40

On 1 January 2009, a company, Yeti, granted an employee the right to choose between (i) 30,000 Yeti shares or (ii) a cash-payment equivalent to the price of 24,000 Yeti shares on 3

what type of transaction is a service revenue earned on account? a) asset source, b) asset use, c) asset exchange or d) claims exchange?

On January 1, 2013, NewTune Company exchanges 15,000 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each NewTune''s shares has a $4 par value and a

In our discussion so far, we have supposed that the compounding is done yearly, here let us see the case where compounding is complete more often.  In such case the equation (1) is

Q. What do you mean by Inflation? Predicts of future inflation of sales prices and variable costs should be prepared Therefore that a nominal NPV evaluation is able to be under

You have previously been exposed to the 'Introduction and analysis' of financial statements in previous sections of this course. From now you might have acquired several familiarit