Debtors property at commencement of bankruptcy, Financial Accounting

DEBTOR'S PROPERTY AT COMMENCEMENT OF BANKRUPTCY

1) Doctrine of "relation back":

The trustee's title to the debtor's property is deemed to relate back to the commencement of the bankruptcy, i.e., the time the act of bankruptcy was committed on which the receiving order was made or, if the bankrupt committed more than one act of bankruptcy

2) Protected transactions:   

Payment or transfer of money or property of the bankrupt by a person in possession of it to some other person, after the date, but before the gazetting, of the receiving order, provided that the transferor had no notice of the receiving order.

3) Completed executions:

A judgement creditor cannot retain the "benefit" of an execution or attachment, unless he has completed it-

  • Before the date of the receiving order, and
  • Without notice of the presentation of a petition or the commission of an available act of bankruptcy,

 

4) Trust Property:

Property held by the bankrupt on trust for any other person does not pass to his trustee.

5) Excepted articles:

The trustee cannot claim the tools of the bankrupt's trade or necessary wearing apparel and bedding of the bankrupt and his family to a total value not exceeding Shs 500.

6) Determinable interests:

The trustee cannot claim property in which the bankrupt's interest is determinable upon bankruptcy, except property settled by the bankrupt on himself on these terms.

7)  Personal rights of action:

Rights of action relating to the bankrupt's property pass to the trustee, but those affecting his person, e.g. for assault or libel, do not.

8) Contracts of personal service:

Contracts involving the personal skill of the bankrupt do not pass to the trustee: other contracts do unless disclaimed.

Posted Date: 12/13/2012 12:26:49 AM | Location : United States







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