Insolvency Made Clear: A Guide for Debtors

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Legal Terms Defined A ‘disposition’ of an asset is when that asset is sold or given away. It would include where security is given over that asset. A ‘distribution’ is a payment. For example, the Trustee in Bankruptcy may make a ‘distribution’ to creditors, if the bankrupt held sufficient funds. The ‘equity’ in a house is the value remaining after the mortgage. This will be the only meaning of the word ‘equity’ in this book. ‘Estate’ has two distinct meanings. For most of this book, ‘estate’ is used to refer to the belongings of a bankrupt which they do not keep after the making of a bankruptcy order. This would include cash in the bank, but exclude their tools of trade. However, ‘estate’ has a wider meaning in Chapter 10 if someone dies, and refers to all their possessions. ‘Execution’ of a judgment is enforcing it: typically this is a bailiff attending to remove property to sell and pay off the judgment creditor. A ‘guarantee’ is an agreement to pay someone else’s debts. A ‘hearing’ is when the parties speak in front of a judge in a court. An ‘income payments agreement’ (IPA) is an agreement where someone who is bankrupt agrees to pay future earnings to their Trustee in Bankruptcy. If the bankrupt does not agree, the Trustee can apply for an ‘income payments order’ (IPO). An ‘individual voluntary arrangement’ (IVA) is a formal process which, if 75% of creditors agree, can lead to the debt of a person being reduced or the debtor being given more time to pay. ‘Insolvent’ means either ‘unable to pay debts as they fall due’; or alternatively ‘debts are greater than assets’. The first definition is usually easier to prove: if someone is meant to pay a debt but cannot, they are technically insolvent. An ‘Insolvency Practitioner’ (IP) is a qualified professional, similar to a chartered accountant who specialises in insolvency matters. An ‘interim order’ protects an individual from their creditors while they try to pass an individual voluntary arrangement. ‘Interest’ can be either a) additional money which needs to be repaid when taking out a loan, or b) the right to some part of property. For example, someone’s interest in a house might be the first £50,000; or an interest under the Family Law Act 1996 which entitles them to live there. ‘Interest’ can also be used xxiii
Insolvency Law Made Clear – A Guide For Debtors as an abstract noun, meaning ‘what is good for somebody’, as in “this is not in my interests”. A ‘judgment’ is the decision of a judge. A ‘judgment debt’ is a debt which arises out of a court judgment. If person A is ordered to pay person B, A is the judgment debtor and B is a judgment creditor. The difference between a judgment debt and a regular debt is only in the difficulty of disputing a judgment debt, since the court would already have heard the arguments and made its decision. The ‘jurisdiction’ of the court is whether the court has the ability to do something. A ‘liability’ is a legal obligation which someone owes to someone else. It could be an outstanding debt, but it could also be an obligation to make future payments or a non-monetary obligation such as to maintain insurance on a flat. A ‘liquidated’ debt is one that can be quantified. A promise to pay £10,000 is a liquidated debt, but a claim for damages resulting from an accident is not liquidated until the court determines its value. ‘Liquidation’ is an entirely different concept, and is the word used to describe the ‘bankruptcy’ of a company. A ‘liquidator’ is an Insolvency Practitioner who is appointed to run a company’s liquidation. ‘Listing’ is when the court finds time in its diary for a hearing. A ‘litigant in person’ is someone who does not have professional legal representation. ‘Litigation’ is when someone brings a claim in court. A ‘moratorium’ is a period when nobody can bring a claim or enforce a debt. A statement given under ‘oath’ is one where the witness swears to tell the truth, either while holding a Bible or another sacred text. A non-religious witness can instead ‘affirm’ their evidence. The difference between an oath and an affirmation is of no legal importance. An ‘offence’, as used in this book, is a crime. The ‘Official Receiver’ (OR) is a qualified Insolvency Practitioner who works for the Government. The Official Receiver is the first person who takes control after xxiv
Page 1 and 2: INSOLVENCY LAW MADE CLEAR A GUIDE F
Page 3 and 4: Published June 2021 ISBN 978-1-9163
Page 6: Acknowledgments I owe special thank
Page 9 and 10: Insolvency Law Made Clear - A Guide
Page 20 and 21: Preface: the effects of the pandemi
Page 22 and 23: Legal terms defined ‘The Act’:
Page 26 and 27: Legal Terms Defined a bankruptcy or
Page 28 and 29: Legal Terms Defined A ‘third part
Page 30 and 31: Introduction and aim of this book T
Page 32 and 33: Introduction And Aim Of This Book A
Page 34: Part 1 BANKRUPTCY The next few chap
Page 46 and 47: Chapter 2 Effect of bankruptcy This
Page 48 and 49: Effect Of Bankruptcy will only choo
Page 50 and 51: Effect Of Bankruptcy Box 5: HOW MUC
Page 52 and 53: Effect Of Bankruptcy by giving noti
Page 54 and 55: Effect Of Bankruptcy the seller goe
Page 56 and 57: Effect Of Bankruptcy The judge held
Page 58 and 59: Effect Of Bankruptcy Finally, the f
Page 60 and 61: Effect Of Bankruptcy to have an awk
Page 62 and 63: Effect Of Bankruptcy 2.10 Running t
Page 64 and 65: Effect Of Bankruptcy although it is
Page 66 and 67: Effect Of Bankruptcy either volunta
Page 68 and 69: Effect Of Bankruptcy 2.16 Investiga
Page 70 and 71: Effect Of Bankruptcy ‘privileged

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