Debtor meaning

Checklist and timeline A straightforward checklist and timeline sets out each stage from the point a debt becomes due right through to a bankruptcy petition being presented. It is relevant to personal insolvency where a statutory demand has been served on the debtor. For further reading on statutory demands, please refer to: Statutory demands for restructuring and insolvency professionals—overview Practice Note: What is a statutory demand?...

Procedural Guide This Procedural Guide explains the process for seeking an attachment of earnings order under the Attachment of Earnings Act 1971 and the Family Procedure Rules 2010, SI 2010/2955, Pt 39, to enforce a maintenance order by directing deductions straight from a debtor’s earnings... Eligibility to apply Handling arrears exceeding 12 months Obligations of the employer and the debtor Where the judgment debtor is an employed individual, the judgment creditor may apply to enforce the judgment against the debtor’s wages or salary. If granted, the employer must make regular deductions from the debtor’s pay and remit those sums to the court. This is referred to as an attachment of earnings order (AEO). See also Practice Note: Attachment of earnings order... FPR 2010, SI 2010/2955, Pt 39 applies to any proceedings that began, but were not concluded, before 6 April 2016 (when procedural amendments were introduced), in the same manner as it applies to proceedings commenced on or after that...

This Checklist outlines the principal steps a creditor should take to secure and execute a charging order against land, with clear pointers to fuller guidance provided at each stage. Preliminary considerations Confirm there is an appropriate judgment debt, verify the debtor holds an interest in land, and also weigh any other practical matters. See Practice Notes: Charging orders and orders for sale—practical considerations Charging orders—what are they and when to use them—CPR 73 Application Decide if the application has to be filed with the Civil National Business Centre. See: Charging orders—is this a CNBC or non-CNBC case?—flowchart...

Flowchart This flowchart outlines a clear method for deciding how payments from a solvent debtor, owing multiple debts to a single creditor, ought to be properly allocated among those liabilities...

This Flowchart explains when exactly a creditor may commence action against a debtor once a letter of claim has been issued in line with the Pre-Action Protocol for Debt Claims (the Protocol)...

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Sriram (acting by her litigation friend, the Official Solicitor) v Revenue and Customs Commissioners and another [2024] EWHC 853 (Ch), [2024] All ER (D) 86 (Apr) What are the practical implications of this case? Creditors should act with care to ensure that service of a statutory demand (and bankruptcy petition) is properly effected, particularly where a debtor seeks to avoid service and has several addresses. Attempts to serve ought to be clearly and contemporaneously recorded. Creditors are required to take all reasonable measures to bring the document or documents to the debtor’s attention. However, this does not oblige them to attend or write to every address associated with the debtor that they know about. The addresses that must be tried will depend on the circumstances of the individual case. A wide, scattergun strategy to service is not expected. By way of example, if a debtor holds multiple properties and there is no reply to a visit or correspondence at one property, that location may not amount to a ‘known’...

ING Bank NV v Tumpuan Megah Development Sdn Bhd Civil Appeal No. 02(i)-19-06-2024(W) What are the practical implications of this case? This Federal Court ruling carries notable procedural and substantive consequences for arbitration and commercial litigation practitioners. It confirms that an award creditor holding a foreign arbitral award from a reciprocating country (such as the UK) enjoys a strategic election between: enforcing the award directly under the AA 2005; or obtaining a ‘confirmation judgment’ at the seat and enforcing that judgment via the REJA 1958. The court found that REJA and the AA are distinct, self-contained regimes; the AA does not supersede or displace REJA. This settles that taking the REJA pathway is a legitimate statutory route, not any species of ‘judgment laundering’. The decision has immediate consequences for client strategy: advisers to award creditors may now treat the REJA course as a viable, and potentially more robust, enforcement approach. By contrast, advisers to award debtors should note that where a creditor...

Original news Banwaitt v Dewji and another [2015] EWHC 3441 (Ch) What issues did this case raise? This decision will interest practitioners advising judgment creditors with a charging order against a debtor’s share in jointly owned property, and anyone dealing with security over beneficial interests in land more generally. The central issue was whether a married couple, as co-owners, could have a charging order removed from the title by the wife buying the husband’s stake. The claimant had secured a substantial judgment which the debtor failed to satisfy. A charging order was then obtained over the debtor’s beneficial interest in the family home. Thereafter, the debtor and his wife transferred the property into her sole name for a modest sum. She argued the order no longer bound the title—maintaining it had been ‘overreached’ under sections 2 and 27 of the Law of Property Act 1925. The debtor tendered that sum to the claimant. However, the debtor had not obtained the claimant’s agreement in advance to the disposition and, in...

Where a respondent (debtor) cannot be located, enforcing an order becomes problematic. If nothing useful is known and no redirection address exists, information may be sought from government departments. This Practice Note explains when departmental data may be obtained to identify a debtor/respondent’s address, the steps for making an application, the relevant Family Procedure Rules 2010 (FPR 2010), SI 2010/2955—most notably FPR 2010, PD 6C and FPR 2010, SI 2010/2955, Pt 18—and summarises the details government departments require. It covers applications issued on or after 6 April 2022; for the Practice Direction that applied to applications issued before 6 April 2022, see the earlier version referenced there... Application On an applicant’s request, the court may ask government departments to disclose the address of a debtor who cannot be traced. The governing provisions sit within FPR 2010. From 18 January 2023, FPR 2010, PD 6C was replaced by a revised PD 6C for applications issued on or after 6 April 2022; for the previous iteration applicable to earlier applications,...

The use of invoice discounting and factoring of receivables as business finance has expanded markedly in the UK over the past 25 years. Introduction to receivables purchase transactions Invoice discounting and factoring fall within receivables purchase arrangements under which a supplier of goods and/or services (often called the seller or the supplier) transfers, typically by way of assignment, debts owed to it by the purchaser of those goods and/or services (commonly referred to as the buyer or the account debtor), usually together with all associated rights. These receivables purchases are frequently completed at a discounted purchase price. That said, receivables can also be acquired for an amount equal to their face value, with the supplier paying the purchaser a purchase fee. For a variety of reasons, suppliers may opt to sell receivables (on a no recourse or limited recourse basis) in preference to borrowing...

Once a bankruptcy petition and its supporting documents have been presented (or issued) at court, the petitioning creditor’s initial step is to ensure the documents are served on the debtor. This Practice Note outlines the methods by which a petitioning creditor must serve the bankruptcy petition on the debtor. It does not cover service of any other documents within insolvency proceedings. For further guidance on issuing a bankruptcy petition or what to expect at the bankruptcy hearing, see: Creditors’ bankruptcy petitions—grounds and documents required for presentation Bankruptcy petitions—process and procedure post-presentation of the petition The general rule—personal service of the bankruptcy petition on the debtor The general rule is that a sealed copy of the bankruptcy petition must—unless the court orders substituted service—be served on the debtor personally by an officer of the court, the petitioning creditor, the creditor’s solicitor, or a person instructed by the creditor or their solicitor. In practice, most bankruptcy petitions are personally served on the debtor by...

This Agreement is dated [ insert day and month ] 20[ insert year ] Parties The Consenting Lenders (as set out in Schedule 1); [ The Consenting Bondholders (as set out in Schedule 2); ] [ insert name of debtor company ], a company registered in [ insert country eg England and Wales ] with company number [ insert registered number ], whose registered office is at [ insert address ]; [ The Material Companies (as set out in Schedule 3); ] Recitals On [ insert date ], the directors of the Company announced a proposal to restructure the claims of certain creditors of the [ Company OR Group ] following a period of financial distress. On [ insert date ], the Company and certain creditors entered into a Standstill Agreement in connection with the proposed restructuring. [ On [ insert date ], the Company and certain creditors agreed non-binding heads of terms for the...

To: The individuals named in Schedule 1 to this letter [ insert names of Lenders ] From: [ insert name of solicitors for the Creditors' Committee or the name of the Chair ] Date: [ insert date ] Appointment of Creditors' Committee We refer to the conversations at the meeting of creditors convened by [ insert name of debtor company ] (the Company) concerning the proposed restructuring...

Current ratio Date of calculations: [ insert date of calculations ] Formula: Current assets ÷ Current liabilities Calculation: Result: Result from previous month/year: % movement: If the ratio slips under 1.0, the firm lacks sufficient current assets to meet its current liabilities as they become due. Compare this outcome to the previous current ratio result. If the current ratio is declining and nearing 1.0, calculate the other ratios to gain a clearer view of why the firm is running out of money...

There are a number of points to weigh up when determining if a consumer credit agreement is regulated by the Consumer Credit Act 1974 (CCA 1974). Under the CCA 1974, s 8(1), a consumer credit agreement is described as an agreement between an individual (“the debtor”) and any other person (“the creditor”) whereby the creditor extends credit of any amount...

If a monetary order in family proceedings remains unpaid, the judgment creditor may, in those circumstances, seek a judgment summons by applying to the court for enforcement. The process is regulated by the Family Procedure Rules 2010 (FPR 2010), SI 2010/2955, Pt 33, and if the court is persuaded that the debtor has defaulted on a debt and has, or has had since the order, the means to discharge the unpaid amount yet has refused or failed to do so, it may order the debtor’s committal to prison. This sanction applies where default relates to the ordered sum and endures despite the debtor’s means...

Limitation issues when enforcing a judgment Under Section 24(1) of the Limitation Act 1980, proceedings to rely upon any judgment cannot be commenced after the expiry of six years calculated from the date on which that judgment initially became enforceable for enforcement purposes...