A bankrupt, who has not previously been adjudged bankrupt and conforms to the stipulations and conditions under the Bankruptcy Ordinance, will be automatically discharged four years from the date of the Bankruptcy Order provided that there is no non-commencement order or objection to his/her discharge from the creditors and the Trustee. If he/she has been previously adjudged bankrupt, the period will be five years.

Where a bankruptcy order is made on or after 1 November 2016 and the bankrupt fails to physically attend the initial interview, or has physically attended the initial interview, but failed to provide the trustee at the initial interview with all of the information concerning the bankrupt’s affairs, dealings and property as reasonably required by the provisional trustee/trustee, the provisional trustee/trustee may apply to court for an order that the relevant period shall not commence to run. The effect of the non-commencement order is to delay the commencement of the relevant period of bankruptcy until compliance with the terms of the order. As a result, the date of the automatic discharge will be delayed accordingly.

The Trustee will realise a bankrupt’s property in and outside Hong Kong. It is an offence for a bankrupt to conceal information relating to his/her property or to fail to deliver his/her property to the Trustee, and the bankrupt may be liable to be prosecuted. When the assets are vested in the Trustee, the Trustee has the power to continue to administer the assets even after the bankrupt’s discharge from bankruptcy.
 

The creditors or the Trustee may object on the grounds listed out in Section 30A(4) of the Bankruptcy Ordinance which includes non-cooperation, unsatisfactory conduct, failure to prepare an annual statement of his earnings and acquisition, etc.

The bankrupt may file a defence to the court and there will be a hearing.

When a bankrupt is discharged, the discharge releases him/her from all the provable debts, but not those incurred by fraud, a fine imposed for an offence, damages in respect of personal injuries to any person, etc.

The Trustee will realise a bankrupt’s property in and outside Hong Kong. It is an offence for a bankrupt to conceal information relating to his/her property or to fail to deliver his/her property to the Trustee, and the bankrupt may be liable to be prosecuted. When the assets are vested in the Trustee, the Trustee has the power to continue to administer the assets even after the bankrupt’s discharge from bankruptcy.

The Trustee will investigate all assets disposed of by the bankrupt prior to the presentation of the bankruptcy petition. It is an offence for a bankrupt to transfer any assets with a fraudulent intent, and the bankrupt may be liable to be prosecuted.

Generally speaking, the Trustee will realise the bankrupt’s share in the joint property.

The provident fund of the bankrupt will be considered as part of the bankrupt’s assets subject to the provisions of individual provident fund.

In general, his/her pension will cease to be payable upon the making of the Bankruptcy Order. He/She may submit an application to the Chief Executive through the Civil Service Bureau for approval of ex-gratia payments. In the event it is approved, the Trustee will assess his/her reasonable domestic needs and if there is any balance, the bankrupt will be required to repay his/her debts.
 

No.

Yes, the debtor can choose IVA. IVA is a formal procedure under the Bankruptcy Ordinance to provide an alternative to bankruptcy. A debtor makes a repayment proposal to the court and the creditors. If it is approved, it will legally bind all creditors.
 

(a) A debtor can avoid the stigma of bankruptcy. He/She will be free from the legal restrictions provided for under the Bankruptcy and other Ordinances and may be able to retain his/her job/profession.

(b) For the creditors, as compared with bankruptcy, they may expect better repayment from the debtor as the latter would have more incentive to make repayment.

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.

 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.

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 : –

• Calling the Publications Sales Section of ISD at 2537 1910
• Visiting the online Government Bookstore at http://www.gov.hk/en/residents/government/publication/publication/bkstore.htm
• Downloading the order form from the ISD website at http://www.isd.gov.hk/eng/index.htm and submit the order online or by fax to
  2523 7195.
• Placing order with ISD by e-mail at [email protected].
• Downloading from the website of the Official Receiver’s Office free of charge at http://www.oro.gov.hk/eng/publications/debtor.htm.

(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.

 (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.

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.

(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.

(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.

The Official Receiver has the right to do so under the legislation and may do so if necessary.
 

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.

He/She should not unless there are reasonable grounds for doing so.
 

The Trustee will not usually allow the bankrupt to make payments in respect of the life insurance policy taken out.

 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.

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.

No

IVA is a formal procedure under the Bankruptcy Ordinance to provide an alternative to bankruptcy.  It involves application to the court for an interim order during which no bankruptcy or other legal proceedings may be taken or continued against the debtor.  A debtor makes a repayment proposal to the court and creditors.  If approved, it will legally bind all creditors.

A debtor can avoid the stigma of bankruptcy.  He/she will be free from the restrictions of bankruptcy and may be able to retain his/her job/profession, and to act as a director of a company.

For the creditors, as compared with bankruptcy, they may expect better repayment from the debtor as the debtor has more incentive to make repayment of his debts.

A debtor or an undischarged bankrupt may apply for IVA if he/she intends to make a proposal for repayment of his/her debts.

The debtor should find a person to act as his/her nominee of the IVA.  Any person who, in the opinion of the court, has suitable experience and qualifications can act as nominee.  A nominee is usually an accountant or a solicitor.  More information can be obtained at the website of the Hong Kong Institute of Certified Public Accountants at www.hkicpa.org.hk or the Law Society of Hong Kong at www.hklawsoc.org.hk.

The debtor is required to deposit with the nominee an initial sum of $12,150 to cover the fees, expenses and remuneration to be incurred by the nominee in connection with the work done by him in respect of the IVA.

When applying to the court for an interim order, the debtor has to pay a court fee in accordance with the rates set out in Item 12 in Table A of the Bankruptcy (Fees and Percentages) Order.
 

Under rule 122W of the Bankruptcy Rules, the Official Receiver is required to maintain a register of IVA, which contains the details of the arrangement such as the name, Hong Kong Identity Card number and address of the debtor; the date on which the arrangement was approved by the creditors; the name and address of the nominee, etc.  The register is searchable by members of the public.

Bankruptcy or other legal proceedings may be taken or continued. The debtor cannot apply for an interim order again in the next 12 months.

The debtor is bound by the terms of the approved IVA.  If the debtor fails to comply with the obligations under the IVA, the nominee, or any creditors may petition for his/her bankruptcy.

The debtor commits an offence if he/she makes any false representation or commits any other fraud for the purpose of obtaining the approval of his/her creditors to an IVA proposal.  A person guilty of such offence is liable to a fine at level 2 and to imprisonment for 6 months.
 

The Official Receiver’s Office has published “Simple Guide on Individual Voluntary Arrangement” and “Individual Voluntary Arrangement – The Main Processing Stages” for distribution at 10/F., High Block, Queensway Government Offices, 66 Queensway, Hong Kong or through ORO website at www.oro.gov.hk