The ordinary procedure of an insolvency involves two-stage, a statutory demand followed by a bankruptcy petition. The service of a ‘statutory demand’ in the prescribed form is simply one means of establishing ‘inability to pay’. The procedure is intended to be brief, and is aimed at establishing an inability to pay and no more. It is not a general sieve where the court considers generally whether the petition will succeed or fail. At the petition stage the court may consider the reasonableness of an offer to secure or to compound as required by section 271(3). At that stage the court looks at whether the debtor is able to pay all his debts and looks at the debtor’s contingent and prospective liabilities.
Judges:
Jacobs J
Citations:
[1994] 1 WLR 917
Statutes:
Insolvency Act 1986 268(1)(a) 271(2)
Jurisdiction:
England and Wales
Cited by:
Cited – Owo-Samson v Barclays Bank Plc, Boyden CA 21-May-2003
The appellant challenged a formal statutory demand which had led to his bankruptcy. The demand had included the anticipated cost of realising the charged property, and also had been inflated to allow for extra costs of dealing the appellant who was . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 26 July 2022; Ref: scu.182733