322. Proof of debts323. Mutual credit and set-off(1) Subject to this section and the next, the proof of any bankruptcy debt by a secured or unsecured creditor of the bankrupt and the admission or rejection of any proof shall take place in accordance with the rules.
(2) Where a bankruptcy debt bears interest, that interest is provable as part of the debt except in so far as it is payable in respect of any period after the commencement of the bankruptcy.
(3) The trustee shall estimate the value of any bankruptcy debt which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value.
(4) Where the value of a bankruptcy debt is estimated by the trustee under subsection (3) or, by virtue of section 303 in Chapter III, by the court, the amount provable in the bankruptcy in respect of the debt is the amount of the estimate.
(1) This section applies where before the commencement of the bankruptcy there have been mutual credits, mutual debts or other mutual dealings between the bankrupt and any creditor of the bankrupt proving or claiming to prove a bankruptcy debt.324. Distribution by means of dividend(2) An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other.
(3) Sums due from the bankrupt to another party shall not be included in the account taken under subsection (2) if that other party had notice at the time they became due that a bankruptcy petition relating to the bankrupt was pending.
(4) Only the balance (if any) of the account taken under subsection (2) is provable as a bankruptcy debt or, as the case may be, to be paid to the trustee as part of the bankrupt's estate.
(1) Whenever the trustee has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the bankruptcy, declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have respectively proved.325. Claims by unsatisfied creditors(2) The trustee shall give notice of his intention to declare and distribute a dividend.
(3) Where the trustee has declared a dividend, he shall give notice of the dividend and of how it is proposed to distribute it; and a notice given under this subsection shall contain the prescribed particulars of the bankrupt's estate.
(4) In the calculation and distribution of a dividend the trustee shall make provision -
(a) for any bankruptcy debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,
(b) for any bankruptcy debts which are the subject of claims which have not yet been determined, and
(c) for disputed proofs and claims.
326. Distribution of property in specie(1) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but -
(a) when he has proved that debt he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receiver; and
(b) any dividend or dividends payable under paragraph (1) shall be paid before that money is applied to the payment of any such further dividend.
(2) No action lies against the trustee for a dividend, but if the trustee refuses to pay a dividend the court may, if if thinks fit, order him to pay it and also to pay, out of his own money -
(a) interest on the dividend, at the rate for the time being specified in section 17 of the Judgments Act 1838, from the time it was withheld, and
(b) the costs of the proceedings in which the order to pay is made.
327. Distribution in criminal bankruptcy(1) Without prejudice to sections 315 to 319 (disclaimer), the trustee may, with the permission of the creditors' committee, divide in its existing from amongst the bankrupt's creditors, according to its estimtaed value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.
(2) A permission given for the purposes of subsection (1) shall not be a general permission but shall relate to a particular proposed exercise of the power in question; and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required by subsection (1) has been given.
(3) Where the trustee has done anything without the permission required by subsection (1), the court or the creditors' committee may, for the purpose of enabling him to meet his expenses out of the bankrupt's estate, ratify what the trustee has done.
But the committee shall not do so unless it is satisfied that the trustee acted in a case of urgency and has sought its ratification without undue delay.
(1) Where the bankruptcy order was made on a petition under section 264(1)(d) (criminal bankruptcy), no distribution shall be made under sections 324 to 326 so long as an appeal is pending (within the meaning of section 277) against the bankrupt's conviction of any offence by virtue of which the criminal bankruptcy order on which the petition was based was made.328. Priority of debts(1) In the distribution of the bankrupt's estate, his preferential debts (within the meaning given by section 386 in Part XII) shall be paid in priority to other debts.329. Debts to spouse(2) Preferential debts rank equally between themselves after the expenses of the bankruptcy and shall be paid in full unless the banrupt's estate is insufficient for meeting them, in which case they abate in equal proportions between themselves.
(3) Debts which are neither preferential debts nor debts to which the next section applies also rank equally between themselves and, after the preferential debts, shall be paid in full unless the bankrupt's estate is insufficient for meeting them, in which case they abate in equal proportions between themselves.
(4) Any surplus remaining after the payment of the debts that are preferential or rank equally under subsection (3) shall be applied in repaying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy; and interest on preferential debts ranks equally with interest on debts other than preferential debts.
(5) The rate of interest payable under subsection (4) in respect of any debt is whichever is the greater of the following:
(a) the rate specified in section 17 of the Judgments Act 1838 at the commencement of the bankruptcy, and
(b) the rate applicable to that debt apart from the bankruptcy.
(6) This section and the next are without prejudice to any provision of this Act or any other Act under which the payment of any debt or the making of any other payment is, in the event of bankruptcy, to have a particular priority or to be postponed.
330. Final distribution(1) This section applies to bankruptcy debts owed in respect of credit provided by a person who (whether or not the bankrupt's spouse at the time the credit was provided) was the bankrupt's spouse at the time of commencement of the bankruptcy.
(2) Such debts -
(a) rank in priority after the debts and interest required to be paid in pursuance of section 328(3) and (4), and
(b) are payable with interest at the rate specified in section 328(5) in respect of the period during which they have been outstanding since the commencement of the bankruptcy;
and the interest payable under paragraph (b) has the same priority as the debts on which it is payable.
331. Final Meeting(1) When the trustee has realised all the bankrupt's estate or so much of it as can, in the trustee's opinion, be realised without needlessly protracting the trusteeship, he shall give notice in the prescribed manner either -
(a) of his intention to declare a final dividend, or
(b) that no dividend, or further dividend, will be declared.
(2) The notice under subsection (1) shall contain the presrcibed particulars and shall require claims against the bankrupt's estate to be established by a date ("the final date") specified in the notice.
(3) The court may, on the application of any person, postpone the final date.
(4) After the final date, the trustee shall -
(a) defray any outstanding expenses of the bankruptcy out of the bankrupt's estate, and
(b) if he intends to declare a final dividend, declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved in the bankruptcy.
(5) If a surplus remains after payment in full and with interest of all the bankrupt's creditors and the payment of the expenses of the bankruptcy, the bankrupt is entitled to the surplus.
332. Saving for the bankrupt's home(1) Subject as follows in this section and the next, this section aplplies where -
(a) it appears that the trustee that the administration of the bankrupt's estate in accordance with this Chapter is for practical purposes complete, and
(b) the trsutee is not the official receiver.
(2) The trustee shall summon a final general meeting of the bankrupt's creditors which -
(a) shall receiver the trustee's report of his administration of the bankrupt's estate, and
(b) shall determine whether the trustee should have his release under section 299 in Chapter III.
(3) The trustee may, if he thinks fit, give the notice summoning the final meeting at the same time as giving notice under section 330(1); but, if summoned for an earlier date, that meeting shall be adjourned (and, if necessary, further adjourned) until a date on which the trustee is bale to report to the meeting that the administration of the bankrupt's estate is for practical purposes complete.
(4) In the administration of the estate it is the trustee's duty to retain sufficient sums from the estate to cover the expenses of summoning and holding the meeting required by this section.
(1) This section applied where -
(a) there is comprised in the bankrupt's estate property consisting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse, and
(b) the trustee has been unable for any reason to realise that property.
(2) The trustee shall not summon a meeting under section 331 unless either -
(a) the court has made an order under section 313 imposing a charge on that property for the benefit of the bankrupt's estate, or
(b) the court has declined, on an application under that section, to make such an order, or
(c) the Secretary of State has issued a certificate to the trustee stating that it would be inappropriate or inexpedient for such an application to be made in the case in question.
333. Duties of bankrupt in relation to trustee Supplemental
334. Stay of distribution in case of second bankruptcy(1) The bankrupt shall -
(a) give to the trustee such information as to his affairs,
(b) attend on the trustee at such times, and
(c) do all such other things,
as the trustee may for the purposes of carrying out his functions under any of this Group of Parts reasonably require.
(2) Where at any time after the commencement of the bankruptcy any property is acquired by, or devolves upon, the bankrupt or there is an increase of the bankrupt's income, the bankrupt shall, within the prescribed period, give the trustee notice of the propetty or, as the case may be, of the increase.
(3) Subsection (1) applies to a bankrupt after his discharge.
(4) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).
335. Adjustment between earlier and later bankruptcy estates(1) This section and the next apply where a bankruptcy order is made against an undischarged bankrupt; and in both section -
(a) "the later bankruptcy" means the bankruptcy arising from that order,
(b) "the earlier bankruptcy" means the bankruptcy (or, as the case may be, most recent bankruptcy) from which the bankrupt has not been discharged at the commencement of the later bankruptcy, and
(c) "the existing trustee" means the trustee (if any) of the bankrupt's estate for the purposes of the earlier bankruptcy.
(2) Where the existing trustee has been given the prescribed notice of the presentation of the petition for the later bankruptcy, any distribution or other disposition by him of anything to which the next subsection applies, if made after the giving of the notice, is void except to the extent that it was made with the consent of the court or is or was subsequently ratified by the court.
This is without prejudice to section 284 (restrictions on dispositions of property following bankruptcy order).
(3) This subsection applies to -
(a) any property which is vested in the existing trustee under section 307(3) (after-acquired property);
(b) any money paid to the existing trustee in pursuance of an income payments order under section 310; and
(c) any property or money which is, or in the hands of the existing trustee represents, the proceeds of sale or application of property or money falling within paragraph (a) or (b) of this subsection.
(1) With effect from the commencement of the later bankruptcy anything to which section 334(3) applies which, immediately before the commencement of that bankruptcy, is comprised in the bankrupt's estate for the purposes of the earlier bankruptcy is to be treated as comprised in the bankrupt's estate for the purposes of the later bankruptcy and, until there is a trustee of that estate, is to be dealt with by the existing trustee in accordance with the rules.
(2) Any sums which in pursuance of an income payments order under section 310 are payable after the commencement of the later bankruptcy to the exisiting trustee shall form part of the bankrupt's estate for the purposes of the later bankruptcy; and the court may give such consequential directions for the modification of the order as it thinks fit.
(3) Anything comprised in a bankrupt's estate by virtue of sub- section (1) or (2) is so comprised subject to a first charge in favour of the esisting trustee for any bankruptcy expenses incurred by him in relation thereto.
(4) Except as provided above and in section 334, property which is, or by virtue of section 308 (personal property of a bankrupt exceeding reasonable replacement value) is capable of being, comprised in the bankrupt's estate for the purposes of the earlier bankruptcy, or of any bankruptcy prior to it, shall not be comprised in his estate for the purposes of the later bankruptcy.
(5) The creditors of the bankrupt in the earlier bankruptcy and the creditors of the bankrupt in any bankruptcy prior to the earlier one, are not to be creditors of his in the later bankruptcy in respect of the same debts; but the existing trustee may prove in the later bankruptcy for -
(a) the unsatisfied balance of the debts (including any debt under this subsection) provable against the bankrupt's estate in the earlier bankruptcy;
(b) any interest payable on that balance; and
(c) any unpaid expenses of the earlier bankruptcy.
(6) Any amount provable under subsection (5) ranks in priority after all the other debts provable in the later bankruptcy and after interest on those debts and, accordingly, shall not be paid unless those debts and that interest have first been paid in full.