Creditors' Bankruptcy Petition
The rules for these petitions are contained in 10.6 to 10.33. This section also covers IVA supervisors making a petition. The good news is that under the new Rules, there are very few changes to the current procedure.
The contents required for a petition are set out in rules 10.7 to 10.9. Thankfully, the Court is due to publish a bankruptcy petition form and so I will not go into too much depth but as the content is not changing drastically, I expect the form will look familiar when it does come out. The petition must still be verified by a statement of truth (r10.10), but the requirements for this have not substantially changed and again, a form has been promised.
Content of the petition
- A little more detail has been provided as to what is required (r10.7) but this is due to the prescribed form being removed. The new form should address these points, which mainly concern the details of the creditor presenting the petition.
- The only major change to content is to alternative names and addresses. This applies to other trading names, other businesses, other residential addresses and other business addresses.
- They are only required if the names or addresses were in use at the time the debt was incurred, or have been used subsequently (and are only included so far as they are within the petitioner's knowledge).
- However, if they have been known by any other name (not in the context of trading) and that is known to the petitioner, it must be included regardless of when it was used (r10.8(3), as is the current position.
Filing and service
- Per current practice, the petition may only be filed when the OR deposit has been paid, and at least two copies must be filed (plus one for any IVA supervisor or liquidator).
- The requirements as to which Court the petition must be filed in are unchanged from the current position (r10.11).
- The service requirements for most documents are now detailed in schedule 4 of the Rules. The requirements follow part 6 of the CPR, with a helpful table to distinguish between which documents are "claim forms" and which are "other documents", and if that position is varied further by these rules.
- In the case of a bankruptcy petition, service must be enacted in accordance with the personal service requirements of CPR6.5.
Certificates of service
- Still required for both the statutory demand and the petition, although they have moved where the requirements are in the rules to be helpful.
- If a statutory demand is required under s268, a certificate of service of the statutory demand must be filed alongside the petition. The required contents can be found in rule 10.3 but have not changed substantially.
- A certificate of service of the petition is required under Schedule 4(6). The requirements for this have not substantially changed, and are the same as a certificate of service for a winding up petition.
Prior to the hearing
- The petition must be served on the debtor at least 14 days before the hearing unless the court feels a shorter period is necessary (e.g. the debtor has absconded) (r10.21).
- If the debtor wishes to oppose the petition, they must file a notice with the court and the petitioner not less than five business days before the hearing (r10.18).
- Any other creditors that intend to appear must give notice to the petitioner in accordance with r10.19 no later than 4pm the day before the hearing.
- The petitioner must prepare a list for the court under r10.20 of those that have given notice under r10.19 and give it to the court on the day of the hearing.
- These requirements are unchanged from the current rules, and again, standard forms have been promised by the Court.
Rules on postponement, adjournment, substitution of petitioners, change of carriage, and withdrawal of the petition are generally unchanged (rules 10.22 to 10.30).
In short, the only real change to our part of the process is the alternative addresses point. Otherwise, it is just a question of substituting the new rule numbers for the old, and waiting on the new Court forms. I have prepared an updated checklist with the new rule numbers (attached) that will be uploaded to knowhow in due course.
When a bankruptcy order is made
More significant changes apply to the mechanics of bankruptcy. In brief, on the making of a bankruptcy order the OR automatically becomes the trustee under the new section 291A of the IA (unless there is already an IVA supervisor, in which case the supervisor may be appointed trustee immediately). Therefore under s306 IA the estate vests immediately in the OR on the making of the bankruptcy order. The OR may then apply under s296 IA to be substituted for another trustee, but this gives more certainty of the estate between the bankruptcy order and the appointment of the trustee.
There have also been some tweaks to interim receivers (as they now only apply whilst the bankruptcy petition is pending, s286 and 287 IA) and the obligations of the bankrupt to provide information (s288 and s291 IA).