Bankruptcy

Brief introduction of bankruptcy proceedings

When debtors (or bankrupts) fail to repay their debts and the Court has granted bankruptcy orders against them, the debtors’ assets are collected and realised (sold off and converted to cash) by a neutral person (known as the “Trustee”). This Trustee can be the Official Receiver, who is employed by the Official Receiver’s Office. The proceeds from the realisation are then distributed to the creditors (persons who are owed money by the debtors) for repaying the relevant debts or part of the debts.

During the effective period of the bankruptcy order, part of the debtor’s earnings is utilised for repayment. The Court also investigates the causes of bankruptcy and may punish the bankrupt if any provision in the Bankruptcy Ordinance (Cap. 6 of the Laws of Hong Kong) has been breached.

The debtor in bankruptcy proceedings can be an individual person or several persons (e.g. a partnership), excluding limited companies. When the bankruptcy order is discharged, the debtor is free from the monetary liabilities that were incurred before bankrupt.

Generally speaking, a bankruptcy case will undergo the following stages:

- Issuing a statutory demand for debt repayment to the debtor (if applicable)

- Presenting a bankruptcy petition to the Court, to the Official Receiver's Office and to the debtor

- Court hearing

- Granting of bankruptcy order by the Court

- The debtor's assets are collected and realised by the Trustee/Official Receiver

- Distributing the relevant proceeds and part of the debtor's income to the creditors

- Discharge of bankruptcy order

1. Bankruptcy proceedings can only be commenced by creditors but not by the debtors. Is this true? (With a brief procedural guide.)



2. What are the main functions of the Official Receiver's Office?



3. Can I find out the bankruptcy record of any person from the Official Receiver's Office?



4. What are the consequences of bankruptcy?



5. What should a bankrupt do or avoid doing after the granting of a bankruptcy order?



6. What can the creditors do after the granting of a bankruptcy order?



7. Can I institute bankruptcy proceedings against my employer for unpaid wages?



8. When will the bankrupt be discharged from the bankruptcy order? Will the bankrupt still be liable for the debts after the discharge of the bankruptcy order?



9. What criminal offences are related to bankruptcy?



10. Case illustration