BLAW212 2024 PRACTICE EXAM QUESTIONS WITH COMPLETE SOLUTIONS GRADED A+
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Course
BLAW212
Institution
BLAW212
BLAW212 2024 PRACTICE EXAM QUESTIONS WITH COMPLETE SOLUTIONS GRADED A+
Insolvent definition - Answer-unable to pay ones debts or discharge ones liabilities
bankruptcy definition - Answer-where a real person is adjudged insolvent by a court and where that person's property is administered for and...
BLAW212 2024 PRACTICE EXAM
QUESTIONS WITH COMPLETE
SOLUTIONS GRADED A+
Insolvent definition - Answer-unable to pay ones debts or discharge ones liabilities
bankruptcy definition - Answer-where a real person is adjudged insolvent by a court and
where that person's property is administered for and dividend amongst creditors
Liquidation or winding up - Answer-where an insolvent company's assets are realised to
discharged its liability, terminating the business of the company
4 core areas of insolvency law - Answer-1. A system for the efficient collection and
equitable distribution of an insolvents property amongst creditors
2. provide relief for involvement individuals eg discharge after 3 years
3. Providing means by which insolvent individuals and businesses can enter into binding
compromises with thier creditors
4. security enforcement procedures eg appointment of a receiver
1 collection and distribution of an insolvents property - Answer-- involves the
compulsory taking of the insolvents assets which they then pass to the control of the an
official who will deal with them in accordance to the law
- creditors are prevented fro taking further proceedings or seizing creditors assets
- distribution of the insolvents assets to creditors
2. relief for insolvent individuals - Answer-Discharge from further liability once they have
gone through the bankruptcy process.
Automatic discharge from bankruptcy after 3 years.
Companies are not discharged.
No asset procedure available. Debtors with debts of less than $40,000 and no realisable
assets avoid bankruptcy.
3. binding compromises with creditors - Answer-Debtors avoid bankruptcy and creditors
may get a higher return than they would otherwise
May involve a period where creditors are restrained from proceeding against the
debtors and compromise arrangement involving payment of a portion of the debt
4. enforcing a security - Answer-secured creditors generally are outside any bankruptcy
or liquidation
, Debtors
- can ask OA to have himself adjudicated bankrupt
-if debtor has combined debts of $1000 or more
-debtor must first file a statement of affairs
- debtor automactially adjudicated bankrupt when application with OA filed
Inital consequences of bankruptcy - Answer-- OA appointed to manage
- property of bankrupt vests in OA
- Bankruptcy is advertised
- any current proceedings to recover debts from bankrupt are stopped
Dividing property amongst creditors - Answer-- OA take any power abnkrupt have over
property
- take control over property, selling and distributing it
- Insolvency act 2006 give OA any necessary powers
- OA can disclaim onerous property and terminate contracts
- property could include entitlement under a will
- property acquired during process also vest in OA
Exceptions to vesting of property - Answer-- bank rupt may retian nay necessary tools
of trade and furnitures up to OA, and vehcile of $5000
- may be allowed to make an allowance to family
- OA may allow bankrupt to have $1000 at time
- secured creditors retain the benefit of thier security, but OA takes any value above
secured debts
Duties of Bankrupt - Answer-- disclose property he has or acquired during process
- deliver control to OA
- provide financial information
- be available for meetings
- co-operate with creditors
- must not act as directors
- cant leave NZ
- advise of his adress
- co-operate with examination
distribution to creditors - Answer-Debts must be "proved" to the OA.
Debtors file a Proof of Debt advising amount owed and providing evidence.
OA has power to admit or reject creditors' claims.
OA has power to summon and examine any person who has submitted a Proof of Debt.
Offences by bankrupt - Answer-offence include:
- bankrupt incurs a debt not
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