Impact of Bankruptcy

Question

 Q: What are the criteria for a debtor to file a petition for bankruptcy?
 
A: If a debtor wishes to present a petition for bankruptcy, he/she must satisfy the court that he/she is unable to pay his/her debts.
 
Q: How much will it cost a debtor to file a petition for bankruptcy?
 
A: The debtor will be required to deposit with the Official Receiver a sum of $8,000 to cover the fees and expenses to be incurred by the Official Receiver (or trustee) and pay a court fee of $1,045 at the High Court.
 
Q: What are the procedures for filing a debtor's petition for bankruptcy?
 
A: The procedures are :-


(a) Complete a "Debtor's Bankruptcy Petition" on Form 3 of Bankruptcy (Forms) Rules and a "Statement of Affairs (Debtor's Petition)" on Form 28C of Bankruptcy (Forms) Rules. These forms are contained in 'Debtor's Bankruptcy Petition Procedural Guide' which can be obtained by the following ways at $18 each : -


(b) Deposit with the Official Receiver a sum of $8,000 to cover the fees and expenses to be incurred by the Official Receiver (or trustee).


(c) Have the Petition attested and the Statement of Affairs sworn.


(d) Go to the Registry of the High Court to :-

  • pay a court fee of $1,045;
  • obtain a date for the hearing of the Petition; and
  • file the Petition and the Statement of Affairs.

(e) Submit a sealed copy of the Petition and a copy of the Statement of Affairs to the Official Receiver immediately after (d) (iii) above.

Q: What happens if a debtor has no money to petition for bankruptcy?
 
A: (a) A debtor who files a petition must deposit with the Official Receiver a sum of $8,000 to cover the fees and expenses to be incurred by the Official Receiver (or trustee). There is no provision in the Bankruptcy Ordinance for exemption of the deposit. The debtor is also required to pay a court fee of $1,045 at the High Court.

 (b) Creditors can also file a petition for the bankruptcy of the debtor. A creditor who files a petition must deposit with the Official Receiver a sum of $11,250 to cover the fees and expenses to be incurred by the Official Receiver (or trustee) and pay a court fee of $1,045 at the High Court.

Q: After a petition for bankruptcy has been presented, will it be advertised in the newspaper?
 
A: The Official Receiver will not advertise a bankruptcy petition. Once a Bankruptcy Order is made, the Official Receiver will advertise the Bankruptcy Order in the Gazette and two newspapers : one Chinese and one English.
 
Q: Will the Trustee inform the employer of the bankrupt?
 
A: (a) If the bankrupt is working in the private sector, the Trustee will not approach his employer unless during the course of investigation and assessment, the Trustee finds it necessary to do so.
(b) If the bankrupt is a civil servant, the Official Receiver must, under CSR459, inform the Departmental Secretary of the bankrupt's department, the Civil Service Bureau and the Treasury.
 
Q: Will bankruptcy affect the employment of a bankrupt in certain professions?
 
A: (a) A bankrupt may not be able to practise in certain professions such as lawyer, estate agent, securities dealer or act as a director of a limited company. The relevant professional bodies should be consulted for further information.
(b) A bankrupt working in the banking sector is required to inform his/her employer under the Banking Ordinance.
(c) A bankrupt working in other sectors should check whether there is any stipulation of such in his/her employment contract or other company documents.
 
Q:Will the staff of the Official Receiver's Office go to the bankrupt's house for inspection?
 
A: The Official Receiver has the right to do so under the legislation and may do so if necessary.
 
Q: Is a bankrupt required to pay his debts? What will happen to a bankrupt's assets and income?
 
A: In principle, a bankrupt's debts will be met from his/her assets and income. For this purpose, a bankrupt must hand over all his/her assets, both overseas and local, to the Trustee immediately upon the granting of the Bankruptcy Order. He/She must also inform the Trustee of his/her income. The Trustee will, after taking a view of the reasonable domestic needs of the bankrupt and his/her family, distribute the balance of his/her assets and income to his/her creditors to repay his/her debts.
 
Q: Can a bankrupt travel by taxi?
 
A: He/She should not unless there are reasonable grounds for doing so.
 
Q: Can a bankrupt continue to make payments in respect of the life insurance policy taken out?
 
A: The Trustee will not usually allow the bankrupt to make payments in respect of the life insurance policy taken out.
 
Q: Can a debtor obtain a loan after presentation of a bankruptcy petition?
 
A: After a bankruptcy petition has been presented to the court, the debtor should refrain from obtaining any further loans.
 
Q: Can a bankrupt travel overseas?
 
A: Yes, provided that the expenses are not met from his/her assets and income.
 
Q: Is a bankrupt required to inform his/her Trustee of any change in his/her contact details?
 
A: A bankrupt should immediately notify his/her Trustee of his/her change in name, address and telephone number (also fax number and e-mail address, if any) in Hong Kong and elsewhere. He/She should respond to the Trustee’s inquiries within a reasonable period of time.
 
Q: Will family members of a bankrupt be required to bear the bankrupt's indebtedness?
 
A: No.

(Hong Kong)

Answer

Alan Cheung

Alan Cheung

Director – Hong Kong Office

+852 5128 6432
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