To avoid an asset reverting to a bankrupt after the end of his period of bankruptcy, the asset must be realised. An assignment of a beneficial interest for a future price does not amount to a realisation.

A notice of intention to appoint administrators (a Notice), although not an absolute bar to making a final charging order, will generally act as a moratorium. This prevents creditors from taking steps to enforce their claims against a company without the permission of the court.

The courts have the power to and increasingly will make a civil restraint order where an individual persistently issues claims that are totally without merit.

The court has held that a statutory demand is valid despite the high default interest rate on an underlying loan.

For debtors with limited liabilities, little surplus income and minimal gross assets, the new Debt Relief Order (DRO) is a further tool to consider in managing their debts. DROs, which came into force on 6 April 2009, are aimed at those who find they are unable to pay off their debts within a reasonable time but for whom other forms of debt relief, such as bankruptcy or Individual Voluntary Arrangements, are unavailable, or perhaps unaffordable.

What are the criteria for a DRO?

A DRO can be applied for where the debtor:

When a company goes into administration, time does not stop running against its creditors' claims for the purposes of the Limitation Act 1980. This is different to where a company goes into liquidation as time does then stop running. The effect there is that the claim stays live whereas in an administration, once the limitation period has expired, the claim is time-barred.

Where the entirety of a debt is not included in an agreement to settle, a creditor can continue to prove in a bankruptcy for the balance.

Gowling WLG's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.

A party cannot appeal a decision made in bankruptcy proceedings by reason only of a personal interest in the outcome. An economic interest is a pre-requisite.

This was confirmed by the court in Sands and another v Monem and another, in which the bankrupt had transferred the interest in his home to his wife before being made bankrupt. The transfer was made allegedly in order to settle a debt, although this was not reflected in the documentation. That transfer was successfully set aside as a preference by the bankrupt's trustee.

Where a debtor's assets exceed his liabilities, the onus is on the debtor to prove he can not pay his debts if a creditor seeks to annul the bankruptcy order.

In Paulin v Paulin and another, the defendant petitioned for his own bankruptcy claiming he was unable to pay his debts. The claimant applied for the order to be annulled claiming the defendant could afford to pay his debts and was deliberately attempting to defeat her claims in the matrimonial proceedings.