Section 20 of Insolvency Act CAP 53: Proceedings on creditor's application
(1) The Court may not make a bankruptcy order on a creditor's application unless it is satisfied that the debt, or one of the debts, in respect of which the application was made is either—
(a) a debt which, having been payable at the date of the application or having since become payable, has been neither paid nor secured or compounded for; or
(b) a debt that the debtor has no reasonable prospect of being able to pay when it falls due.
(2) If the application contains a statement of the kind referred to in section 19, the Court may not make a bankruptcy order until at least twenty-one days have elapsed since the service of the relevant statutory demand.
(3) The Court may dismiss the application if it is satisfied that the debtor is able to pay all of the debtor's debts or is satisfied—
(a) that the debtor has made an offer to secure or compound for a debt in respect of which the application is made;
(b) that the acceptance of that offer would have required the dismissal of the application; and (c) that the offer has been unreasonably refused.
(4) In determining for the purposes of subsection (3) whether the debtor is able to pay all of the debtor's debts, the Court shall take into account the debtor's contingent and prospective liabilities.
(5) In determining for the purposes of this section what constitutes a reasonable prospect that a debtor will be able to pay a debt when it falls due, the Court shall presume that the prospect given by the information known to the creditor when the creditor entered into the transaction resulting in the debt was a reasonable prospect.
(6) Nothing in sections 17 to 19 prevents the Court from allowing a creditor's application to be amended by the omission of any creditor or debt and to be proceeded with as if action taken for the purposes of those sections had been taken only by or in relation to the remaining creditors or debts.
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- Section 21 - Creditor's execution process not to be issued or continued
(1) A creditor who makes an application for a bankruptcy order in respect of a debtor may not issue an execution process against the debtor in respect of the property of the debtor to recover a debt...
- Section 22 - Power of relevant court to stay execution processes by other creditors or allow them on terms
(1) After a creditor's application has been made, the debtor or any creditor may apply to the relevant court for an order stopping the issue or continuance by any other creditor of an execution...
- Section 23 - Execution process issued by other court
(1) This section applies if an execution process has been issued by a court other than the High Court.
(2) If it is proved to the issuing court that an application for a bankruptcy order in respect...
- Section 24 - No restriction on execution process if bankruptcy application withdrawn or dismissed
The restrictions in sections 21 to 23 on issuing or continuing an execution process do not apply if an application is withdrawn or dismissed.
- Section 25 - When court may adjudge debtor bankrupt
(1) The Court may make a bankruptcy order in respect of the debtor if the creditor has complied with section 7.
(2) The Court may refuse to adjudge a debtor bankrupt if—
(a) the applicant creditor...
- Section 26 - When the Court may stay application
The Court may, at any time, stay an application by a creditor for bankruptcy on such terms, and for such period, as the Court considers appropriate.
- Section 27 - Orders if more than one application
(1) If there is more than one bankruptcy application in respect of a debtor, and one application has been stayed by an order of the Court, the Court may, if it believes there is a good reason to do...
- Section 28 - Orders if there is more than one order
If an application made by a creditor for a bankruptcy order relates to more than one debtor, the Court may refuse to make such an order in respect of one or some of the debtors without affecting the...
- Section 29 - Power of the Court to make order staying bankruptcy application, etc.
(1) This section applies if a debtor—
(a) has made a disposition of all, or substantially all, of the property of the debtor to a trustee for the benefit of the creditors of the debtor;
(b) has...
- Section 30 - Court may stay application while underlying debt is determined
(1) This section applies if a debtor appears in opposition to a creditor's application and the debtor claims that the debtor—
(a) does not owe a specified debt to the creditor; or
(b) owes a...
- Section 31 - Court may allow one creditor to be substituted for another
In the case of a creditor's application, the Court may substitute another creditor for the creditor making the application if—
(a) the applicant creditor has not proceeded with due diligence, or at...
- Section 32 - When debtor may make application for bankruptcy order
(1) A debtor may make an application to the Court for an order adjudging the debtor bankrupt only on the grounds that the debtor is unable to pay the debtor's debts.
(2) The Court may decline to deal...
- Section 33 - Appointment of insolvency practitioner by the Court
(1) Subject to section 34, on the hearing of a debtor's application, the Court may not make a bankruptcy order if it appears to the Court—
(a) that if a bankruptcy order were made the total amount of...
- Section 34 - Action on report of insolvency practitioner
(1) The insolvency practitioner appointed under section 33 shall—
(a) inquire into the debtor's financial affairs; and
(b) within such period as the Court may specify, submit a report to the Court...
- Section 35 - Joint application can be made by two or more debtors
Two or more debtors, who are partners in a business partnership, may make a joint application under section 32.
- Section 36 - Appointment of interim trustee of debtor's property on application of creditor
(1) After a creditor's application has been made, the creditor or any other creditor of the debtor may apply to the Court for an order for the appointment of an authorised insolvency practitioner as...
- Section 37 - Additional orders after appointment of interim trustee
(1) After the appointment of an interim trustee under section 36, the Court may, on an application made under subsection (2), make additional orders under that section.
(2) An application for the...
- Section 38 - Notice of appointment of interim trustee to be published
(1) As soon as practicable after the appointment of an interim trustee, the trustee shall publish a notice of the appointment—
(a) in one or more newspapers circulating in Kenya; and
(b) in such...
- Section 39 - Execution process not to be issued after notice of appointment of trustee is published
(1) A creditor of the debtor may not issue an execution process under section 23 after notice of the appointment of the interim trustee has been published.
(2) A creditor may not continue an...
- Section 40 - Effect of staying execution
If execution is stayed under section 39, sections 109, 110, 111, 112, 113, 114 and 116 apply as if the order staying execution were a bankruptcy order.
- Section 41 - Bankruptcy commences on making of bankruptcy order
A bankruptcy under this Act commences on the date and at the time when a bankruptcy order is made in respect of the debtor.
- Section 42 - Date and time of bankruptcy order to be recorded
(1) On making a bankruptcy order, the Court shall record the date and time when the order was made.
(2) If the debtor is adjudged bankrupt on the application of the debtor, the Official Receiver...
- Section 43 - Registrar of the Court to notify trustee of bankruptcy order
As soon as practicable after the Court has made a bankruptcy order in respect of a debtor, the Registrar of the Court shall forward a copy of the order to the Official Receiver.
- Section 44 - Official Receiver to nominate bankruptcy trustee
(1) As soon as practicable after receiving a copy of a bankruptcy order, the Official Receiver shall nominate a qualified person to be bankruptcy trustee in respect of the debtor's property.
(2) In...
- Section 45 - Presumption that act was done, or transaction was entered into or made, after bankruptcy
If a doubt arises as to whether an act was done, or a transaction entered into or made, before or after the time when a bankruptcy commenced, it is to be presumed, until the contrary is proved, that...
- Section 46 - Bankruptcy order to be binding on all persons
A bankruptcy order becomes binding on the bankrupt and all other persons—
(a) on the expiry of the time within which an appeal may be lodged against the order; or
(b) if an appeal is lodged in...
- Section 47 - Official Receiver to maintain public register of undischarged and discharged bankrupts
(1) The Official Receiver shall establish and maintain a public register of undischarged and discharged bankrupts.
(2) The Official Receiver shall maintain the register in accordance with Division 2...
- Section 48 - What happens or is to happen on and after bankruptcy commences
(1) When a bankruptcy order commences—
(a) all proceedings to recover the bankrupt's debts are stayed; and
(b) the property of the bankrupt (whether in or outside Kenya), and the powers that the...
- Section 49 - Official Receiver to serve notice on bankrupt requiring the bankrupt to lodge statement of the bankrupt's financial position
(1) Within thirty days after receiving notice of a bankruptcy order, the Official Receiver shall serve on the bankrupt a notice—
(a) stating that a bankruptcy order has been made in respect of the...
- Section 50 - Bankrupt to lodge statement of financial position with bankruptcy trustee
(1) Within fourteen days after being served with the notice in accordance with section 49 (or within such extended period not exceeding sixty days as the Official Receiver may allow), the bankrupt...
- Section 51 - Creditors entitled to inspect and take copies of statement of bankrupt's financial position
(1) A person who in writing claims to be a creditor of the bankrupt is entitled, at all reasonable times
(either personally or through an agent—
(a) to inspect the statement of the bankrupt's...
- Section 52 - Official Receiver to convene first meeting of creditors
(1) The Official Receiver shall, subject to subsection (5), convene the first meeting of the bankrupt's creditors within the prescribed period, unless the Official Receiver decides, in accordance with...
- Section 53 - Circumstances in which Official Receiver may decide not to convene first meeting of creditors
(1) The Official Receiver may decide not to convene a first creditors' meeting if the Official Receiver—
(a) has sent to each creditor named in the statement of the bankrupt's financial position, and...
- Section 54 - Documents to be sent with notice of meeting
(1) The Official Receiver shall send the following documents with the notice of the first meeting of creditors—
(a) a summary of the bankrupt's statement of assets and liabilities;
(b) extracts...
- Section 55 - Power of creditors to requisition meeting
(1) If, in the case of a bankruptcy, the Official Receiver has not yet convened a first meeting of creditors, or has decided not to convene such a meeting, any creditor of the bankrupt may request the...
- Section 56 - Execution process not to be begin or continue after bankruptcy order advertised
(1) A creditor may not begin or continue an execution process in respect of the bankrupt's property or person for the recovery of a debt provable in the bankruptcy, after the Official...
- Section 57 - Effect of bankrupt's death after bankruptcy order
If a bankrupt dies after being adjudged bankrupt, the bankruptcy continues in all respects as if the bankrupt were still alive.
- Section 58 - Creditors' role at creditors' meetings
The role of the creditors in the bankruptcy primarily—
(a) to attend meetings of the creditors;
(b) to submit proofs of the debts of the bankrupt; and (c) to examine the bankrupt at those...
- Section 59 - Power to appoint bankruptcy trustee
(1) The power to appoint a person as a bankruptcy trustee in respect of a bankrupt's estate, or to fill a vacancy in such an appointment, is exercisable—
(a) except as provided by paragraph (b) or...
- Section 60 - Consequences of failure of creditors' meeting to appoint bankruptcy trustee
(1) If a meeting convened under section 52 or 55 is held but no one is appointed as bankruptcy trustee, the Official Receiver shall decide whether or not there is a need to make such an...
- Section 61 - Power of Official Receiver acting as bankruptcy trustee to appoint another person to act instead
(1) The Official Receiver may, at any time while acting as bankruptcy trustee in respect of a bankrupt's estate under a provision of this Division (other than section 62), appoint another qualified...
- Section 62 - Special case in which the Court may appoint bankruptcy trustee
(1) If a bankruptcy order is made when there is a supervisor of a summary instalment order approved in relation to the bankrupt under Division 2 of Part IV, the Court may, if it considers it...
- Section 63 - Powers of bankruptcy trustee
(1) A bankruptcy trustee may—
(a) with the approval of the creditor's committee, exercise of any of the powers specified in Part 1 of the First Schedule; and
(b) without that approval, exercise any...
- Section 64 - Bankruptcy trustee not to sell bankrupt's property before first creditors' meeting
(1) A bankruptcy trustee may sell property of the bankrupt before the first meeting of creditors only if
—
(a) it is perishable or is likely to rapidly diminish in value;
(b) in that trustee's...
- Section 65 - Title of purchaser from bankruptcy trustee
The title of a purchaser of the bankrupt's property from a bankruptcy trustee under a document that is made in the exercise of the bankruptcy trustee's power of sale in the First Schedule may not be...
- Section 66 - Bankruptcy trustee to bank money and power to invest surplus
(1) A bankruptcy trustee shall establish and maintain a bank account in respect of each bankrupt estate administered by that trustee and shall pay into the relevant account all money that that trustee...
- Section 67 - Bankruptcy trustee may assign right to sue under this Act
(1) A bankruptcy trustee may, if the Court has first approved it, assign a right to sue that is conferred on the bankruptcy trustee by this Act.
(2) An application for such an approval may—
(a) be...
- Section 68 - Proceedings by bankruptcy trustee when bankrupt is partner in business partnership
(1) If a member of a business partnership is adjudged bankrupt, the Court may authorise the bankruptcy trustee to bring proceedings in the names of the bankruptcy trustee and the bankrupt's...
- Section 69 - Discharge or transfer of indenture of apprenticeship or articles of agreement on bankruptcy of employer
(1) If a person is apprenticed or is an articled clerk to an employer who is adjudged bankrupt, either of them may give notice to the bankruptcy trustee or the Official Receiver requesting that the...
- Section 70 - Bankruptcy trustee may apply for directions by the Court
(1) A bankruptcy trustee may apply to the Court for directions on any question concerning the operation of this Part.
(2) A bankruptcy trustee who acts under a direction of the Court discharges the...