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Re K (In Bankruptcy) 24/2/2014 (Plymouth County Court)

26th February 2014

Instructed by petitioning creditor to seek bankruptcy order and oppose the debtors application to set aside the statutory demand listed as a combined hearing before District Judge Richards. The facts were unusual in that unknown to the creditor the debtor had already been made bankrupt and a dividend issued by the trustee in bankruptcy some years previously. The debtor disputed these facts alleging that the creditor had been aware of his previous bankruptcy. Significantly the debt in question pre dated that bankruptcy but had not been proved even though it would fall as a bankruptcy debt in those proceedings. Accordingly by application of section 281 of the Insolvency Act 1986 the debtor had been released from any liability notwithstanding that he had not disclosed this unsecured debt to the trustee. Section 325 limits the creditors rights in these circumstances to a payment from any further dividend but not by presenting a fresh petition. The Judge dismissed the petition but disallowed the debtors costs ordering that each party bear their own costs as each shared “blame” for the impasse.

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Re K (In Bankruptcy) 24/2/2014 (Plymouth County Court)