Welcome

to
our Presentation
Department of Accounting & Information Systems (2 nd Batch)
University of Barisal
A presentation on

Bankruptcy Act - 1997

By group no: 07
Group
Members
Name Roll

Shamim Miah 13 AIS 001

Shariful Islam 13 AIS 018

Bishawmoy Dey 13 AIS 026

Md. Arif Hossain 13 AIS 027

Dola Ghosh 13 AIS 056

Mukta Akter 13 AIS 060

Shawon Kumar Kundu 12 AIS 069

Ayesha Siddika Muneera 12 AIS 065

 What is Bankruptcy?

 Bankruptcy is a legal proceeding in which a person who

cannot pay his or her bills can get a fresh start by
canceling debts. The right to file for bankruptcy is
provided by federal law. Debts are created by state law.
Federal law is superior to state law, so bankruptcy trumps
debts. Filing bankruptcy immediately stops all of your
creditors from seeking to collect debts from you, at least
until your debts are sorted out according to the law.
Procedures of bankruptcy

That bankruptcy can result from any of the following:

a)the debtor making a voluntary bankruptcy (s. 49);

b)the debtor committing an act of bankruptcy and being petitioned
into bankruptcy by a creditor (ss. 42 and 43)
c)the creditors voting against a proposal of the debtor under
Division 1 (s. 57); or
d)the debtor not abiding by the terms of an approved Division I
Proposal and the trustee or a creditor then applying to court to have
the debtor deemed bankrupt (s. 63).
 What does bankruptcy do?
Bankruptcy may make it possible for you to:
 eliminate the legal obligation to pay most or all of your

debts
 stop foreclosure on your house or mobile home and

allow you an opportunity to catch up on missed

payments
 prevent repossession of a car or other property

 stop wage garnishment, debt collection harassment, and

similar credit actions to collect a debt

 restore or prevent termination of utility service

 allow you to challenge the claims of creditors who have

committed fraud or who are otherwise trying to collect

more than you really owe.
 What can bankruptcy not do?
Bankruptcy cannot cure every financial problem. In bankruptcy it
is usually not possible to:
 eliminate certain rights of “secured” creditors. A “secured”

creditor has taken a mortgage or other lien on property as

collateral for the loan. Common examples are car loans and
mortgages.
 discharge types of debts singled out by the bankruptcy laws

for special treatment, such as child support, alimony, certain

other debts related to divorce, most student loans, court
restitution orders, criminal fines, and some taxes.
 protect cosigners on your debts.

 discharge debts that arise after bankruptcy has been filed.

 Common bankruptcy terms
 Automatic Stay – Order from the bankruptcy court against all
creditors to stop lawsuits, garnishments, foreclosure, and all
other attempts to collect a debt from a debtor, effective the
moment a bankruptcy petition is filed.
 Bankruptcy petition – Formal request for bankruptcy relief.
 
 Bankruptcy trustee – Person, usually an attorney, appointed
by the bankruptcy court to oversee your bankruptcy case. His
job is to review the truth of all your financial information and
assure that all parties follow the bankruptcy rules. The trustee
will also take your payments and distribute them according to
your repayment p
 Confirmation – Approval of a repayment plan by a bankruptcy
judge.
 Creditor – Person or business to whom the debtor owes money.

 Debtor – Person who files a bankruptcy petition.

 Discharge – Order from the bankruptcy court releasing a debtor

from personal liability for most claims. It prevents creditors from
taking any actions against a debtor or a debtor’s exempt property.
The purposes of the law of Bankruptcy
are as under;
1.Distribution of assets of the insolvent rationally
2.Settlement of all liabilities of the insolvent to make him liability
free,
3.To save the interest of creditors
4.New life starting of the insolvent
Who may or may not be
adjudged bankrupt?
There are certain institutions against which the court will not
admit any petition under the Bankruptcy Act. You are required to
list such institutions

Or Which institutions are not subject to bankruptcy proceedings

under the Bankruptcy Act, 1997?
Who declared insolvent/bankrupt:

As per Section 11of the Bankruptcy Act, 1997 any person

who

1. maintains his principal business office or is domiciled in

Bangladesh,

2. ordinary resided, had dwelling house, or place of business

in Bangladesh at any time with in a year immediately before
filing of the plaint,
Who may not be declared
insolvent/bankrupt?

1. Any Govt. organization or judicial body,

2. Any charitable or religious body, Such statutory

bodies whose principal objective is not financial gain,

3. Any autonomous body.

Who are official receivers?

The Government keeps an approved list of persons as

receivers who are to be involved in cases of Section 64 of
the Bankruptcy Act, 1997. As per Section 64 of the
Bankruptcy Act, 1997; the court appoints official Receiver
having general powers as conferred by Section 65 of the
Act for administering the property of the insolvent. The
court may itself act as an official receiver under Section
70 of the Act.
Discuss the length if the following
can be insolvent
An infant. An infant cannot be declared insolvent.
Joint debtor. Joint debtor can be declared
insolvent by a single application be made to the court
by the creditors.
Company. A company can be declared insolvent.
 
Foreigner .A foreigner can be declared insolvent.
He needs not to stay in Bangladesh at the time of
petition submitted forinsolvency.
Married woman. A married woman can be declared
insolvent if her assets are insufficient to settle her debts.

Lunatic. A lunatic cannot be declared insolvent. But of

any debt is created and act of insolvency is done at the
time of his being in sound position then he can be
declared insolvent.
Conditions for filling plaint by creditors
(Involuntary petition)

Involuntary petition refers to the claims of creditors for collocating their amount
of debts from the person or organization. According to section 12(1). A person
shall not be entitled to file a plaint against a debtor unless such creditor is an
eligible creditor, and –
(a)The debt owing by the debtor to the eligible creditor or, if two or more
eligible creditors join in the plaint, aggregate amount of debt owing to such
creditors amounts to tk. 5,00,000.00;
(b)Such creditors have a prima facie case that the debtors has committed an act
of bankruptcy; and
(c)The act of bankruptcy, on the basis of which the plaint is filed, has occurred
within one year immediately before the presentation of the plaint.
Condition for filling plaint by debtors
(voluntary petition)
Voluntary petition refers to the plaint of debtor who wants to
declare himself as bankrupt. According to Section 13(1), a person
shall not be entitled to file a plaint unless he specifically mentions
in the plaint that he is unable to pay his debts and –
(a)Further mentions in the plaint that his debts amount to tk.
20,000.00; or
(b)He is under arrest or imprisonment in execution of a decree of
any Court for the payment of debt; or
(c)An order of attachment in execution of such a decree has made,
and is sub-sisting against his property at time of filling plaint.
What is order of adjudication? What
are the effects of an order of
adjudication?

The order of court by which a person is declared to be

insolvent is called the order of adjudication. The order of
adjudication has the following effects;

A.The bankrupt shall assist to the utmost of his capacity in

the realization of his property and the distribution of the
proceeds among his creditors in accordance with the
provisions of this Act
B. All the property of the debtor except the exempted property
shall stand vested in the receiver or where no receiver has been
appointed in the court and shall become divisible among the
creditors, and the property so vested shall be known as the
Estate,

C. The bankrupt is deprived of all powers to enter into

transactions which will bind his creditors in respect of his
property.
Thanks to all
Any questions?