Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 17 · Administration in Bankruptcy
328. Restrictions on dispositions of property by bankrupt
Feedback & supportWhere a person is adjudged bankrupt, any disposition of property made by the bankrupt during the period beginning on the day of the making of the bankruptcy application and ending on the day of the making of the bankruptcy order is void except to the extent that such disposition has been made with the consent of, or been subsequently ratified by, the Court.
bankrupt
“bankrupt” means —(a)an individual debtor who has been adjudged bankrupt by a bankruptcy order; or(b)where a bankruptcy order has been made against a firm, each of the partners in the firm;
For the purpose of this section, a disposition of property includes any payment (whether in cash or otherwise) made to any person by the bankrupt and accordingly, where any payment is void by virtue of this section, the person to whom the payment was made holds the sum paid for the bankrupt as part of the bankrupt’s estate.
property
“property” includes —(a)money, goods, things in action, land and every description of property, wherever situated; and(b)obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to property;
Nothing in this section gives a remedy against any person in respect of —
any property or payment which the person received from the bankrupt before the commencement of the bankruptcy in good faith, for value and without notice that the bankruptcy application had been made; or
any interest in property which derives from an interest in respect of which there is, by virtue of this subsection, no remedy.
Where, after the commencement of his or her bankruptcy, the bankrupt has incurred a debt to a banker or any other person by reason of the making of a payment which is void under this section, that debt is deemed for the purposes of Parts 3 and 13 to 22 to have been incurred before the commencement of the bankruptcy unless —
debt
“debt” means any debt, or any liability to pay money, that is unsecured, present, certain, and of an amount that is fixed or liquidated;
that banker or person had notice of the bankruptcy before the debt was incurred; or
it is not reasonably practicable for the amount of the payment to be recovered from the person to whom it was made.
A disposition of property is void under this section even if the property is not or, as the case may be, would not be comprised in the bankrupt’s estate, but nothing in this section affects any disposition made by a person of property held by that person on trust for any other person.