Laws of Ghana Active 1962Insolvency Act, 1962 Act 153 (Revised Edition)
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ACT 153
Insolvency Act, 1962
ACT 153
INSOLVENCY ACT, 1962
ARRANGEMENT OF SECTIONS
The Official Trustee
SECTION
1. Official Trustee.
2. Powers of the High Court.
3. Insolvent estates fund.
4. Insolvency register.
5. Notices in the Gazette.
6. Liability for default.
7. Annual report.
Insolvency Proceedings
Petitions
8. Commencement of proceedings.
9. Creditor’s petition.
10. Debtor’s petition.
11. Procedure on petitions.
Protection Orders
12. Effect of protection order.
13. Debtor’s statement of affairs.
14. Debtor’s proposal for arrangement with creditors.
15. Creditor’sproof of debts.
16. First meeting of creditors.
Judicial Consideration
17. Application to the High Court,
18. Hearing of application.
19. Insolvency order.
20. Confirmation of arrangement with creditors.
21. Rescission of protection order.
Bankruptcy
22. Public examination of debtor.
23. Adjudication of bankruptcy.
24. Additional duties and disabilities of bankrupt.
General Duties and Disabilities ofDebtor
25. Duty to co-operate with Official Trustee.
26. Duty to disclose after-acquired property.
27. Duty of disclosure when obtaining credit.
V-1401 [Issue 1]
Duty to co-operate with Official Trustee.
26. Duty to disclose after-acquired property.
27. Duty of disclosure when obtaining credit.
V-1401 [Issue 1]
ACT 153
Insolvency Act, 1962
SECTION
28. Liability to arrest and seizure of property. 29. Liability to interception of letters. Discharge
30. Date of discharge. 31. Earlier discharge where additional payment made. 32. Alteration of bankrupt’s discharge date. 33. Certificate of discharge. 34. Effect of discharge. Termination ofProceedings
35. When proceedings come to an end. 36. Order terminating proceedings. Administration ofDebtor’s Property
Assets Passing to Official Trustee
37. Vesting on making of protection order. 38. After-acquired property. 39. Repayments by preferred creditors. 40. Repayment of gifts. 41. Repayments by moneylenders. 42. Sums to be credited to debtor’s official account. General Functions of Official Trustee
43. Duty to protect assets. 44. Duty to realise assets. 45. Duty to verify debts ranking for dividend. 46. Duty to amend admitted proofs. 47. Duty to ascertain priority of debts. 48. Duty to consult creditors. 49. Enquiries by the High Court. Assets Passing from Official Trustee
50. Cases where insolvency order not made. 51. Disclaimer. 52. Fees and outgoings. 53. Return of personal effects to debtor. 54. Dividends to creditors. 55.
ses where insolvency order not made. 51. Disclaimer. 52. Fees and outgoings. 53. Return of personal effects to debtor. 54. Dividends to creditors. 55.
Return of surplus assets to debtor. 56. Payments to be made out of debtor’s property. Arrangements with Creditors apart from Insolvency Proceedings
57. Arrangements to which sections 57 to 61 apply. 58. Arrangements register. 59. Arrangements voidable unless registered. [Issue 1] V -1402
oceedings
57. Arrangements to which sections 57 to 61 apply. 58. Arrangements register. 59. Arrangements voidable unless registered. [Issue 1] V -1402
ACT 153
Insolvency Act, 1962
SECTION
60. Setting aside of arrangement.
61. Arrangement not to count as suspension of payments.
Modifications in Special Cases
62. Debtors not of full age and capacity.
63. Joint debtors.
64. Debtors who are trustees.
65. Participation in insolvency proceedings by subsequent creditors,
Administration ofEstates ofDeceased Insolvents
66. Administration orders.
67. Effect of administration order.
68. Creditors’ proof of debts.
69. First meeting of creditors.
70. Duties of deceased’s repiesentative.
71. Application of sections 37 to 56.
72. Order terminating administration.
73. Death of debtor during insolvency proceedings.
Supplemental Provisions
74.
75.
76.
77.
78.
Offences.
Evidence.
Rules.
Interpretation.
Commencement.
SCHEDULE
Meetings of Creditors
ACT 153
INSOLVENCY ACT, 19621
AN ACT to amend and consolidate the law to provide for the protection of creditors
and debtors in cases of insolvency and for related matters.
The Official Trustee
1. Official Trustee
(1) There shall be an Official Trustee, whose post shall be a public office.
1. This Act was assented to on 20th November, 1962.
V-1403 (Issue 1]
stee
(1) There shall be an Official Trustee, whose post shall be a public office.
1. This Act was assented to on 20th November, 1962.
V-1403 (Issue 1]
ACT 153
Insolvency Act, 1962
(2) An act required or authorised to be done by or in relation to the Official Trustee
may instead be done by or in relation to a public officer authorised in that behalf either by
the Official Trustee or under an enactment. (3) For the purposes of subsection (2) a public officer shall be presumed to be so
authorised unless the contrary is shown. (4) For the purposes of the performance of the functions of office, the Official Trustee
(a) may seek the services of a person who is not a public officer, and
(b) may make appropriate payments for the services of that person. 2. Powers of the High Court
(1) A person aggrieved by an act done by the Official Trustee in the performance of a
function under this Act may appeal to the High Court, which shall make the order that it
thinks fit. (2) Where a person refuses or fails to comply with a requirement made by the Offi
cial Trustee under this Act, the Official Trustee may apply to the High Court, and the
Court may order the requirement to be carried out.
by the Offi
cial Trustee under this Act, the Official Trustee may apply to the High Court, and the
Court may order the requirement to be carried out.
(3) The Official Trustee may, where in doubt as to a matter arising in connection with
the performance of a function under this Act, apply to the High Court for directions. 3. Insolvent estates fund
(1) There is hereby established a public fund to be known as the insolvent estates
fund, to which shall be credited the sums received by the Official Trustee under this Act
and to which the Official Trustee shall debit the sums disbursed under this Act. (2) There is hereby established an account within the insolvent estates fund to which
shall be credited the sums received by the Official Trustee by way of fees and other
charges. (3) The payments required or authorised by this Act to be met out of the insolvent es
tates fund are hereby charged on that fund. 4.
nd other
charges. (3) The payments required or authorised by this Act to be met out of the insolvent es
tates fund are hereby charged on that fund. 4.
Insolvency register
(1) The Official Trustee shall make and keep an insolvency register, in which, as re
spects a debtor in relation to whom a protection order is made, the following information
as it becomes available, shall be recorded within seven days:
(a) the name and address of the debtor, the previous names of the debtor, and a
change in the debtor’s name or address which is notified to the Official
Trustee;
(b) the date of the making of the protection order;
(c) the date on which the protection order ceases to have effect, and the reason
for its ceasing to have effect;
[Issue 1] V -1404
e protection order;
(c) the date on which the protection order ceases to have effect, and the reason
for its ceasing to have effect;
[Issue 1] V -1404
ACT 153
Insolvency Act, 1962
{d) where an insolvency order is made, the date of the making of the order, the
date on which the debtor is discharged and the date on which the insol
vency proceedings are terminated;
(e) where the debtor is adjudged bankrupt, the date of the adjudication, the
appointed discharge date, and an alteration in that date;
() where a participation order is made, the date of the making of the order and
where the debtor’s discharge is revoked by virtue of the order, a statement
to that effect. (2) Where an administration order is made in respect of a deceased debtor, the Offi
cial Trustee shall, within seven days, record in the insolvency register as it becomes
available,
(a) the name and last known address of the debtor, and the previous names of
the debtor,
(b) the date of the making of the administration order, and
(c) the date of the termination of the administration. (3) The insolvency register shall be open, during working hours, for public inspection
on payment of the prescribed fee.
nation of the administration. (3) The insolvency register shall be open, during working hours, for public inspection
on payment of the prescribed fee.
(4) The Official Trustee shall, on an application being made by a person in the pre
scribed form, and on payment of the prescribed fee, provide copies of an entry in the in
solvency register. 5. Notices in the Gazette
(1) Where an information is required to be recorded in the insolvency register, the
Official Trustee, in addition to recording the information in the register, shall publish the
information in the Gazette within fourteen days after it becomes available to the Official
Trustee. (2) Within fourteen days after the end of each June and December, the Official Trus
tee shall publish in the Gazette the names, including former names, and addresses of all
bankrupts, together with the dates on which they were adjudged bankrupt and their ap
pointed discharge dates. 6. Liability for default
(1) A liability does not attach to the Official Trustee in respect of a breach of a duty
imposed on the Official Trustee by or under this Act, and, except in so far as may result
from an order made under subsection (3) of section 42, a liability does not attach to the
Republic in respect of that breach.
in so far as may result
from an order made under subsection (3) of section 42, a liability does not attach to the
Republic in respect of that breach.
(2) Subsection (1) does not affect the institution against a public officer of criminal
proceedings or of disciplinary proceedings under the Civil Service Act, 1993.2
7. Annual report
Within two months after the end of each December, the Official Trustee shall prepare
a report giving details of the operation of this Act during the previous year, and the report
shall be laid before Parliament. 2. P.N.D.C.L. 327. V - 1405 [Issue 1]
g details of the operation of this Act during the previous year, and the report
shall be laid before Parliament. 2. P.N.D.C.L. 327. V - 1405 [Issue 1]
ACT 153
Insolvency Act, 1962
Insolvency Proceedings
Petitions
8. Commencement of proceedings
(1) Insolvency proceedings in respect of a debtor shall be initiated by the presentation
of a petition to the Official Trustee in the prescribed manner, and accompanied by the
prescribed fee, for the making of a protection order, enabling the debtor’s assets to be
conserved for the protection of the creditors until the affairs of the debtor have been con
sidered by the High Court. (2) A petition shall not be presented
(a) in respect of a body corporate, or
(b) in respect of two or more debtors except where the debts are owed by those
debtors jointly. (3) Where a petition is presented, the High Court may, on an application being made
by the Official Trustee, restrain the institution or continuance of civil proceedings by or
against the debtor. (4) Civil proceedings under subsection (3) do not include proceedings by a secured
creditor for the realisation of the security of the secured creditor. (5) A petition may be withdrawn or amended, with the consent in writing of the Offi
cial Trustee, at any time before a protection order is made. 9.
r. (5) A petition may be withdrawn or amended, with the consent in writing of the Offi
cial Trustee, at any time before a protection order is made. 9.
Creditor’s petition
(1) A petition may be presented in respect of a debtor by any one or more of the
creditors if the indebtedness of the debtor to the petitioner, or the petitioners collectively,
in liquidated sums payable immediately amounts to at least one hundred million3 cedis
and if,
(a) the debtor, has, within the preceding three months, suspended payment or
given notice to any of the creditors that the debtor has suspended, or is
about to suspend, payment of the debts; or
(b) the sheriff has, within the preceding three months, and in pursuance of a
writ of fieri facias issued in Ghana in respect of the debtor, taken posses
sion of any of the debtor’s property and either sold the property or retained
it for at least twenty-one days; or
(c) any of the debtor’s creditors is entitled to proceed with the execution, by
means of a writ of fieri facias issued or issuable in Ghana, of a judgment or
order obtained against the debtor not less than seven days previously. (2) Where any of the petitioners is a secured creditor,
(a) the value and description of the security shall be specified in the petition;
and
3.
usly. (2) Where any of the petitioners is a secured creditor,
(a) the value and description of the security shall be specified in the petition;
and
3.
One hundred million cedis is the monetary jurisdiction of the Circuit Court. That amendment was effected
by section 5 of the Courts (Amendment) Act, 2002 (Act 620). [Issue 1] V-1406
e monetary jurisdiction of the Circuit Court. That amendment was effected
by section 5 of the Courts (Amendment) Act, 2002 (Act 620). [Issue 1] V-1406
ACT 153
Insolvency Act, 1962
(b) for the purpose of applying the one hundred million cedis limit under sub
section (1), the amount of the secured debt shall be reduced by the value of
the security as specified. 10. Debtor’s petition
(1) A petition may be presented by a debtor in respect of the affairs of that debtor if
the debtor is insolvent and the indebtedness in liquidated sums payable immediately
amounts to at least one hundred million cedis. (2) Where any of the indebtedness as is referred to in subsection (1) is to a secured
creditor then, unless the total of the unsecured debts amounts to at least one hundred mil
lion cedis in liquidated sums payable immediately, the debtor shall specify in the petition
the value and description, of the security. (3) For the purpose of applying the one hundred million cedis limit under subsec
tion (1), the amount of the secured debt shall be reduced by the value of the security as
specified. 11. Procedure on petitions
(1) A copy of a creditor’s petition shall be served on the debtor by the petitioner two
clear days before the day on which it is presented.
petitions
(1) A copy of a creditor’s petition shall be served on the debtor by the petitioner two
clear days before the day on which it is presented.
(2) After seven days have elapsed following the presentation of a petition, the Offi
cial Trustee shall consider the petition and evidence in support of the petition together, in
the case of a creditor’s petition, with the representations made by the debtor and evidence
in support of the petition. (3) Where a duly presented petition is not withdrawn the Official Trustee shall make
a protection order in respect of the petition. (4) The Official Trustee shall not make a protection order under subsection (3) if it
appears that, owing to payments by the debtor or other change of circumstances, the
debtor’s total indebtedness in liquidated sums payable immediately, including indebted
ness to persons who are not parties to the petition, has, after deduction of the value of
securities held in respect of the indebtedness, fallen below one hundred million cedis. (5) The Official Trustee
(a) may, where a petition was not duly presented or the indebtedness of the
debtor has been reduced,
(b) shall, if the petition has not been withdrawn,
give notice to the petitioner and, in the case of a creditor’s petition, to the debtor that the
petition is dismissed.
etition has not been withdrawn,
give notice to the petitioner and, in the case of a creditor’s petition, to the debtor that the
petition is dismissed.
(6) Where two or more petitions are presented in respect of a debtor, a protection or
der made on any of the petitions shall be deemed to have been made on all of them. (7) After a protection order is made a further petition shall not be presented in respect
of the debtor before the termination of the insolvency proceedings. V -1407 [Issue 1]
der is made a further petition shall not be presented in respect
of the debtor before the termination of the insolvency proceedings. V -1407 [Issue 1]
ACT 153
Insolvency Act, 1962
Protection Orders
12. Effect of protection order
While a protection order has effect,
(a) existing and after-acquired property of the debtor shall vest in the Official
Trustee in accordance with sections 37 and 38, and shall be conserved in
accordance with section 43;
(b) the debtor is subject to the duties and disabilities specified in sec
tions 25, 26, 28 and 29;
(c) civil proceedings by or against the debtor shall not be instituted or contin
ued without the leave of the High Court. 13. Debtor’s statement of affairs
(1) Within seven days after the making of a protection order, or a longer period
which the Official Trustee may allow, the debtor shall, within seven days, lodge with the
Official Trustee a statement of affairs conforming to subsection (2), unless a statement of
affairs has been lodged previously.
n days, lodge with the
Official Trustee a statement of affairs conforming to subsection (2), unless a statement of
affairs has been lodged previously.
(2) The statement of affairs shall contain
(a) particulars of the debtor’s existing and potential assets and of any other
property in the possession or control of the debtor,
(b) a list of creditors, showing the amounts and due dates of debts and particu
lars of securities held,
(c) particulars of the debtor’s transactions during a period which the Official
Trustee may specify,
(d) a statement of the reasons for the debtor’s insolvency, unless the debtor
denies the insolvency, and
(e) any other additional information required by the Rules or by the Official
Trustee. 14. Debtor’s proposal for arrangement with creditors
Within seven days after the making of a protection order, or a longer period, which
the Official Trustee may allow, the debtor may make a proposal for an arrangement with
creditors, and lodge the details of the proposal with the Official Trustee. 15. Creditor’s proof of debts
(1) In this Act “provable debt” means an obligation the value of which is capable of
assessment in money, being
(a) an obligation which, apart from this Act, would have been enforceable by
the creditor against the debtor at the date on which the protection order was
made, or
[Issue 1] V -1408
from this Act, would have been enforceable by
the creditor against the debtor at the date on which the protection order was
made, or
[Issue 1] V -1408
ACT 153
Insolvency Act, 1962
(b) an existing or a future obligation, which, by reason of some transaction
took place before the date on which the protection order was made might,
apait from this Act, have become enforceable by the creditor against the
debtor after that date,
and references in this Act to the value of a provable debt are references to its value apart
from this Act on the date on which the protection order was made. (2) An existing or a future obligation referred to in paragraph (a) of subsection (1)
does not include an obligation unenforceable by virtue of a law relating to limitation of
actions. (3) While a protection order has effect a creditor may lodge with the Official Trustee
a statement, to be known as a proof of debts, in accordance with subsection (4).
ction order has effect a creditor may lodge with the Official Trustee
a statement, to be known as a proof of debts, in accordance with subsection (4).
(4) A proof of debts shall be in two parts, the first part containing brief particulars of,
(a) the values and due dates of provable debts alleged by the creditor to be
outstanding in favour of the creditor against the debtor and the nature and
value of the securities held by the creditor in respect of those debts,
(b) the values and due dates of the obligations outstanding in the debtor’s
favour against the creditor, being obligations which would be provable
debts if a protection order had been made against the creditor on the date
on which the protection order was made against the debtor,
(c) the nature and value of securities of any description held by the debtor in
respect of the obligations mentioned in paragraph (b), and
(d) the total values of the debts, obligations and securities,
and the second part containing details of the transactions from which the debts and obli
gations arose. (5) A copy of the first part of a proof of debts lodged under subsection (3) shall be
given by the Official Trustee to the debtor and to each creditor who is mentioned in the
debtor’s statement of affairs or who, not being so mentioned, lodges a proof of debts.
stee to the debtor and to each creditor who is mentioned in the
debtor’s statement of affairs or who, not being so mentioned, lodges a proof of debts.
(6) Where the debtor knows or believes that the proof of debts is false in a material
particular, the debtor shall inform the Official Trustee of the falsity within fourteen days
of the receipt of the proof of debts. (7) The Official Trustee shall examine the proof of debts lodged under this section
and if, after considering the representations made by the debtor or any other creditor, it
appears
(a) that an item is improperly included or a value is incorrectly stated, or
(b) that the proof of debts is otherwise incorrect,
the Official Trustee shall give notice of the objection to the creditor, who may lodge an
amended proof of debts within the period specified in the notice or the extended period
that the Official Trustee may allow. (8) Where it appears that a proof of debts is correct, the Official Trustee shall give
notice to the creditor admitting the proof of debts subject to verification under section 45. V -1409 [Issue 1]
rrect, the Official Trustee shall give
notice to the creditor admitting the proof of debts subject to verification under section 45. V -1409 [Issue 1]
ACT 153
Insolvency Act, 1962
(9) Where the creditor fails to lodge an amended proof of debts or a further amended
proof of debts, within the period allowed under subsection (7) and the Official Trustee is
still of the opinion that the previous proof of debts is incorrect the Official Trustee shall
give notice to the creditor of the rejection of the proof of debts. 16. First meeting of creditors
(1) The Official Trustee shall call a first meeting of creditors for a date not later than
four weeks after the publication of a protection order, and shall give a notice of the meet
ing which is practicable to each creditor who is mentioned in the debtor’s statement of
affairs or who, if not mentioned, has lodged a proof of debts. (2) Within seven days of giving the notice under subsection (1), the Official Trustee
shall give to each creditor a copy of the debtor’s statement of affairs and of the proposals
for an arrangement with creditors lodged by the debtor together with the observations on
the statement that the Official Trustee may wish to make.
als
for an arrangement with creditors lodged by the debtor together with the observations on
the statement that the Official Trustee may wish to make.
(3) The Official Trustee shall put to the meeting the questions which the Official
Trustee considers appropriate but where the debtor has proposed an arrangement with
creditors, the meeting shall be asked to approve or reject the proposal. (4) An arrangement with creditors is not approved unless it has secured at least three-
quarters of the votes cast, which represent three-quarters of the total amount owed by the
debtor. (5) The meeting shall be closed not later than six weeks after the publication of the
protection order. (6) The Schedule shall apply in relation to the meeting. Judicial Consideration
17. Application to the High Court
(1) Within fourteen days after the closing of the first meeting of creditors, the Offi
cial Trustee shall make an application for judicial consideration to the High Court, to
enable the Court to consider the debtor’s affairs and give its decision as to the future
course of the insolvency proceedings. (2) On an application for judicial consideration, the Court may make
(n) an insolvency order, or
(b) an order confirming an arrangement with creditors, or
(c) an order rescinding the protection order.
the Court may make
(n) an insolvency order, or
(b) an order confirming an arrangement with creditors, or
(c) an order rescinding the protection order.
(3) On the making of an order under subsection (2), the protection order shall cease
to have effect but the debtor’s assets shall remain vested in the Official Trustee except as
otherwise provided by section 50. 18. Hearing of application
(1) At the hearing of an application for judicial consideration the debtor and a credi
tor who has lodged a proof of debts may appear and be heard either in person or by coun
sel, and the Official Trustee shall submit to the High Court a report on the circumstances
of the case. [Issue 1] V-1410
d either in person or by coun
sel, and the Official Trustee shall submit to the High Court a report on the circumstances
of the case. [Issue 1] V-1410
ACT 153
Insolvency Act, 1962
(2) A copy of the report of the Official Trustee to the Court shall be served on a
creditor who has lodged a proof of debts two clear days before the hearing of the applica
tion under subsection (1). (3) The Official Trustee’s report shall include, together with any other information
which may assist the Court a statement of,
(a) the grounds on which the protection order was made,
(b) the assets of the debtor which have become vested in the Official Trustee,
(c) the liabilities of the debtor,
(d) the conduct of the debtor before and since the presentation of the petition,
and
(e) the decisions taken at the first meeting of creditors. (4) The Official Trustee and any other person entitled to appear may, with the leave
of the Court, adduce oral or written evidence and cross-examine a witness called before
the Court. (5) The Official Trustee shall give the assistance that the Court may require to enable
it to reach a conclusion. 19. Insolvency order
(1) The High Court shall make an insolvency order where it does not, under sec
tion 20 or 21, confirm an arrangement with creditors or rescind the protection order.
ourt shall make an insolvency order where it does not, under sec
tion 20 or 21, confirm an arrangement with creditors or rescind the protection order.
(2) Where an insolvency order is made, the Official Trustee shall proceed to realise
and distribute the debtor’s assets in accordance with Part Three, and while the order has
effect,
(a) the debtor is subject to the duties and disabilities specified in sections 25
to 29;
(b) civil proceedings by or against the debtor shall not be instituted or contin
ued without the leave of the Court. 20. Confirmation of arrangement with creditors
(1) Where an arrangement with creditors was approved by the first meeting of credi
tors and it does not appear that grounds for bankruptcy exist or that it is likely that they
exist, the High Court shall make an order confirming the arrangement if,
(a) its terms are fair and reasonable,
(b) it provides for an order of priority of payments corresponding to that laid
down by section 54, and
(c) it provides for payment in full of the fees and outgoings due to the Official
Trustee in respect of the insolvency proceedings.
by section 54, and
(c) it provides for payment in full of the fees and outgoings due to the Official
Trustee in respect of the insolvency proceedings.
(2) Where the conditions specified in paragraphs (a) to (c) of subsection (1) are not
satisfied, the Court may adjourn the hearing of the application for judicial consideration
and direct the first meeting of creditors to be reopened with a view to the submission by
the debtor of proposals for a modified arrangement. V-1411 [Issue 1]
ct the first meeting of creditors to be reopened with a view to the submission by
the debtor of proposals for a modified arrangement. V-1411 [Issue 1]
ACT 153
Ifisolvency Act, 1962
(3) On confirmation by the Court, an arrangement with creditors shall, in respect of
every provable debt owed by the debtor, become binding on the debtor and on each credi
tor who was entitled to lodge a proof of debts, whether or not that creditor voted in favour
of the arrangement. (4) The Official Trustee shall supervise the carrying into effect of an arrangement
with creditors confirmed by the Couit; and the Court may, on the application of the Offi
cial Trustee or a person interested, give the directions that may be expedient for carrying
it into effect. (5) Where it appears to the Court, on the application of the Official Trustee or a per
son interested,
(a) that default has been made in carrying into effect an arrangement with
creditors confirmed by the Court, or
(b) that for a reason it is impracticable or would be unjust to proceed with the
arrangement, or
(c) that confirmation of the arrangement was procured by fraud,
the Court may annul the arrangement but without prejudice to anything previously done
under the arrangement.
of the arrangement was procured by fraud,
the Court may annul the arrangement but without prejudice to anything previously done
under the arrangement.
(6) Where an arrangement is annulled, the Court may make a protection order against
the debtor, and this Act shall apply as if the protection order had been then made on a
creditor’s petition by the Official Trustee. 21. Rescission of protection order
(1) The High Court shall rescind the protection order if it appears,
(a) that having regard to a new evidence and to the circumstances generally,
the order should not have been made; or
(b) that due to payments made on behalf of the debtor or other change of cir
cumstances, payment in full has been achieved. (2) On information given by the Official Trustee that the assets vested in the Official
Trustee are likely to be sufficient to provide for payment in full, the Court may
(a) adjourn the hearing of the application for judicial consideration, and
(b) authorise the Official Trustee to realise and distribute the assets as if an
insolvency order had been made.
ation for judicial consideration, and
(b) authorise the Official Trustee to realise and distribute the assets as if an
insolvency order had been made.
(3) Where the hearing is adjourned under subsection (2), the Official Trustee shall
apply to the High Court for the hearing to be resumed,
(a) when payment in full has been achieved, or
(b) if at any time it appears to the Official Trustee that the assets are not suffi
cient to provide for payment in full,
and where it is satisfied that payment in full has been achieved the Court shall rescind the
protection order. [Issue 1] V-1412
e for payment in full,
and where it is satisfied that payment in full has been achieved the Court shall rescind the
protection order. [Issue 1] V-1412
ACT 153
Insolvency Act, 1962
Bankruptcy
22. Public examination of debtor
(1) Where, at the time when an insolvency order is made, or on an application made
by the Official Trustee at a subsequent time before the debtor’s discharge from the insol
vency order, it appears to the High Court that grounds for bankruptcy exist or that it is
likely that they exist, the Couit shall direct the debtor to undergo an examination at a
public sitting of the Court in respect of the conduct and affairs of the debtor. (2) Subject to section 8 of the Oaths Act, 1972* (by which a person is permitted to
give evidence on affirmation in certain cases) the debtor shall be examined on oath and
shall answer the questions put by the Court or allowed by the Court to be put to the
debtor by or on behalf of the Official Trustee or a creditor who has lodged a proof of
debts. (3) A transcript of the examination shall be made and read to or by the debtor and
signed by the debtor; and the signed transcript may be used as evidence in any subse
quent civil or criminal proceedings affecting the debtor, whether instituted under this Act
or not. 23.
ranscript may be used as evidence in any subse
quent civil or criminal proceedings affecting the debtor, whether instituted under this Act
or not. 23.
Adjudication of bankruptcy
(1) Where a public examination is held under section 22, the High Court shall make
an order adjudging the debtor a bankrupt if one or more of the following have been estab
lished, namely,
(a) that for a consecutive period of twelve months within the three years pre
ceding the making of the protection order, the debtor continued to carry on
the trade or business of the debtor in the knowledge that the debtor was
insolvent;
(b) that the debtor contributed to the insolvency by rash speculations or culpa
ble neglect of the business affairs of the debtor, or by gambling or unjusti
fiable extravagance;
(c) that a provable debt was contracted by the debtor with the intention that it
should not be met or without a reasonable expectation of being able to meet
it;
(d) that the debtor has failed to account satisfactorily for assets of the debtor
which have disappeared since the date of the making of the protection order
or during the year previous to that date;
(e) that the debtor has persistently and without adequate excuse failed to carry
out the duties of the debtor in the insolvency proceedings;
(f) that the debtor is a former bankrupt;
(g) that within the preceding three years the debtor has been convicted of an
offence involving dishonesty in relation to property and has been sentenced
to a term of imprisonment of not less than three months;
4.
onvicted of an
offence involving dishonesty in relation to property and has been sentenced
to a term of imprisonment of not less than three months;
4.
N.R.C.D. 6. V-1413 (Issue 1]
N.R.C.D. 6. V-1413 (Issue 1]
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Insolvency Act, 1962
(h) that within the preceding three years the debtor has been convicted of an
offence under section 7 or 8 of the Registration of Business Names Act, 1962
(Act 151). (2) The order shall specify a date, at least two years after the making of the order, for
the discharge of the bankrupt. (3) Where the Court has directed the debtor to undergo a public examination under
section 22, but the examination cannot be held because the debtor has absconded, or is
medically unfit to appear, or for any other reason, the Court may proceed under this sec
tion as if the examination had been held. 24.
bsconded, or is
medically unfit to appear, or for any other reason, the Court may proceed under this sec
tion as if the examination had been held. 24.
Additional duties and disabilities of bankrupt
(1) In addition to the duties and disabilities imposed on a bankrupt by virtue of an in
solvency order having been made against the bankrupt, the bankrupt shall not,
(a) carry on, or take part in the management or direction of, a trade or business,
(b) operate an account with a bank, building society or similar institution,
(c) obtain credit exceeding one hundred thousand cedis, or
(d) enter into a hire-purchase agreement,
except with the consent in writing of the Official Trustee and in accordance with the di
rections that may be given to the bankrupt by the Official Trustee. (2) A bankrupt shall, in a form approved by the Official Trustee,
(a) keep a record of the income, expenditure and other financial dealings of the
bankrupt, and
(b) lodge with the Official Trustee at intervals of not more than four months an
income and expenditure account.
nancial dealings of the
bankrupt, and
(b) lodge with the Official Trustee at intervals of not more than four months an
income and expenditure account.
(3) For the purposes of paragraph (d) of subsection (1), “hire purchase agreement”
means an agreement for the bailment of goods under which the bailee may buy the goods
or under which the property in the goods will or may pass to the bailee, and where by
virtue of two or more agreements, none of which by itself constitutes a hire-purchase
agreement, there is a bailment of goods, and either the bailee may buy the goods or the
property in them will pass or may pass to the bailee, the agreements shall be treated for
the purpose of this Act as a single hire-purchase agreement made at the time when the
last of the agreements was made. General Duties and Disabilities ofDebtor
25. Duty to co-operate with Official Trustee
(1) In addition to the specific duties imposed on the debtor by or under this Act, the
debtor shall, during the period between the making of a protection order and the termina
tion of the insolvency proceedings, comply within seven days with a direction given by
the Official Trustee in connection with the debtor’s affairs. /
[Issue 1] V-1414
vency proceedings, comply within seven days with a direction given by
the Official Trustee in connection with the debtor’s affairs. /
[Issue 1] V-1414
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Insolvency Act, 1962
(2) During the period specified in subsection (1), the debtor
(a) shall attend every meeting of creditors called by the Official Trustee and
give the information to the meeting that may be required by the chairman;
(b) shall, within seven days, give notice to the Official Trustee of a change in
the name or address of the debtor;
(c) shall not destroy, alter, conceal or dispose of an account-book or any other
record of the financial affairs of the debtor. 26. Duty to disclose after-acquired property
(1) The debtor shall, on becoming entitled to an after-acquired property, give notice
of that property to the Official Trustee. (2) For the purposes of subsection (1), “after-acquired property” means movable
and immovable property, including income, which becomes, or but for this Act would
become, vested in the debtor during the period between the making of the protection or
der and the discharge of the debtor or earlier termination of the insolvency proceedings. 27.
uring the period between the making of the protection or
der and the discharge of the debtor or earlier termination of the insolvency proceedings. 27.
Duty of disclosure when obtaining credit
Where a bankrupt or other debtor who has not been discharged intends, whether per
sonally or jointly with another person to obtain credit exceeding one hundred thousand
cedis from a person, the debtor shall disclose to that person, before seeking to obtain the
credit, that the bankrupt or other debtor is a bankrupt or is undischarged from an insol
vency order. 28. Liability to arrest and seizure of property
(1) Where insolvency proceedings are in progress against a debtor, and it appears to
the High Court that the proceedings are or may be impeded because the debtor,
(a) has absconded, or is likely to do so,
(b) has removed, concealed, destroyed or damaged any property, or is likely to
do so, or
(c) is likely to fail to attend as required before the Court, the Official Trustee
or a meeting of creditors,
the Court may, without prejudice to its powers in relation to contempt of court, issue a
warrant for the arrest of the debtor, or the seizure of the property in question, or for both
the arrest and the seizure.
o contempt of court, issue a
warrant for the arrest of the debtor, or the seizure of the property in question, or for both
the arrest and the seizure.
(2) Where a warrant of arrest is issued under subsection (1) the provisions of the
Criminal and Other Offences (Procedure) Act, 1960 (Act 30) relating to arrest shall apply
in the same way as they apply to the arrest for a criminal offence; and a debtor arrested
under that warrant may, for the purposes of the insolvency proceedings, be conveyed in
custody to a hearing by the Court or the Official Trustee, or to a meeting of creditors. (3) Property seized under subsection (1) shall be dealt with as the Court may direct,
but property which does not belong to the debtor and is not likely to be subject to the
powers of the Official Trustee under Part Three shall be returned to its owner within
twenty-eight days. V-1415 [Issue 1]
likely to be subject to the
powers of the Official Trustee under Part Three shall be returned to its owner within
twenty-eight days. V-1415 [Issue 1]
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Insolvency Act, 1962
29. Liability to interception of letters
(1) Where, during the period between the making of a protection order and the termi
nation of the insolvency proceedings, it appears to the High Court that the proceedings
may be impeded unless the Official Trustee is enabled to inspect the debtor’s incoming
correspondence, the Court may make an order directed to the Minister responsible for
Communications requiring the Minister to cause a postal article in course of transmission
by post to the debtor during the period, not exceeding six months, specified in the order,
to be readdressed to the Official Trustee. (2) Subsection (1) is subject to the operation of clause (2) of article 18 of the
Constitution. (3) After taking the copies and retaining the articles that the Official Trustee consid
ers expedient for the purposes of the proceedings, the Official Trustee shall transmit the
remaining articles to the debtor within seven days. Discharge
30.
pedient for the purposes of the proceedings, the Official Trustee shall transmit the
remaining articles to the debtor within seven days. Discharge
30.
Date of discharge
(1) The date of discharge from an insolvency order of a debtor who is not a bankrupt
shall be the earliest of the following dates, namely,
(a) the date two years after the insolvency order was made;
(b) the date on which payment in full is achieved;
(c) the date specified in a proposal for additional payment approved by the
High Court under section 31. (2) The date of discharge from an insolvency order and from bankruptcy of a debtor
who is a bankrupt shall be the date fixed under section 23 at the time when the debtor was
adjudged bankrupt, or if that date has been altered by the Court under section 31 or 32
shall be the date as altered. (3) The date which will be the date of discharge unless an event occurs to alter it, is
in this Act referred to as the appointed discharge date. 31.
. (3) The date which will be the date of discharge unless an event occurs to alter it, is
in this Act referred to as the appointed discharge date. 31.
Earlier discharge where additional payment made
(1) Where before the appointed discharge date of a bankrupt or other debtor,
(a) a person other than the debtor gives notice to the Official Trustee of a pro
posal to pay to the Official Trustee a sum of money specified in the notice
for distribution to the creditors if the debtor’s discharge is fixed for an ear
lier date specified in the notice, in this section referred to as the specified
date, and
(b) it appears to the Official Trustee that the proposal is made in good faith and
could be carried out,
the Official Trustee shall call a meeting of creditors, to which the Schedule shall apply,
and shall report to the meeting the views of the Official Trustee on the proposal and also,
if the debtor is a bankrupt on the debtor’s conduct since the debtor was adjudged a bank
rupt together with an account of any new facts which have since come to light as to the
conduct and affairs of the debtor before the debtor was adjudged bankrupt. (Issue 1] V-1416
of any new facts which have since come to light as to the
conduct and affairs of the debtor before the debtor was adjudged bankrupt. (Issue 1] V-1416
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Insolvency Act, 1962
(2) After hearing the Official Trustee’s report and the observations made by or on
behalf of the debtor, the meeting shall vote on the proposal. (3) If the meeting approves the proposal the Official Trustee shall apply to the High
Court for its decision on the proposal and shall submit to the Court a report dealing with
the matters required to be dealt with in the report to the meeting and including the deci
sion of the meeting. (4) If the Court is satisfied that it would be proper to discharge the debtor on the
specified date it shall make an order,
(a) fixing that date as the appointed discharge date, and
(b) requiring the person making the proposal to pay the sum specified in the
order to the Official Trustee within the period that is specified in the order.
quiring the person making the proposal to pay the sum specified in the
order to the Official Trustee within the period that is specified in the order.
(5) The specified date
(a) shall not be less than two months after the date on which notice of the pro
posal is given to the Official Trustee, and
(b) in the case of a bankrupt shall not be less than two years after the date on
which the bankrupt was adjudged bankrupt,
and the Official Trustee shall carry out the requirements of this section in sufficient time
to enable the Court to give its decision before the specified date. (6) A sum of money paid under this section is, for the purposes of this section, paid
by way of gift to the debtor unless the proposal states that it is to be paid by way of loan. 32.
s section is, for the purposes of this section, paid
by way of gift to the debtor unless the proposal states that it is to be paid by way of loan. 32.
Alteration of bankrupt’s discharge date
(1) Where, before the appointed discharge date of a bankrupt, it appears to the Offi
cial Trustee that the date shall be altered to an earlier or later date by reason of,
(a) the conduct of the bankr upt since the bankrupt was adjudged a bankrupt, or
(b) new facts which have come to light as to the conduct or affairs before the
bankrupt was so adjudged,
the Official Trustee shall call a meeting of creditors, to which the Schedule shall apply,
and shall report to the meeting the view of the Official Trustee as to the appropriate new
discharge date and as to the debtor’s conduct since the debtor was adjudged a bankrupt,
together with an account of the new facts. (2) After hearing the Official Trustee’s report and the observations made by or on
behalf of the debtor, the meeting shall vote on whether the discharge date should be al
tered and if so what the new date should be.
ons made by or on
behalf of the debtor, the meeting shall vote on whether the discharge date should be al
tered and if so what the new date should be.
(3) Where after the meeting the Official Trustee remains of the opinion that the dis
charge date should be altered the Official Trustee shall apply to the High Court for its
decision, and shall submit to the Court a report dealing with the matters required to be
dealt with in the report to the meeting, including the decision of the meeting. (4) Where the Court is satisfied that the date should be altered it shall make an order
fixing as the appointed discharge date a new date it considers appropriate. V-1417 [Issue 1]
ed that the date should be altered it shall make an order
fixing as the appointed discharge date a new date it considers appropriate. V-1417 [Issue 1]
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Insolvency Act, 1962
(5) The same meeting of creditors may, if the Official Trustee thinks fit, consider a
proposal made under section 31 and matters brought before it under this section, and if
the Court thinks fit, the Court may deal in the same proceedings with applications under
section 31 and under this section. 33. Certificate of discharge
On the arrival of the appointed discharge date of a bankrupt or other debtor, the bank
rupt or the debtor shall be deemed to be discharged, and the Official Trustee shall issue a
certificate of discharge within seven days to the bankrupt or the debtor. 34. Effect of discharge
(1) The discharge of a bankrupt or other debtor
(a) shall release that person from the provable debts whether or not included in
a proof of debts;
(b) shall relieve that person for the future from the duties and liabilities under
sections 24, 26 and 27.
hether or not included in
a proof of debts;
(b) shall relieve that person for the future from the duties and liabilities under
sections 24, 26 and 27.
(2) The discharge of a bankrupt or other debtor
(a) shall not release a person who at the date when the insolvency order was
made was a partner or co-trustee of the bankrupt or the debtor, or was
jointly bound with the bankrupt or the debtor under a contract or otherwise,
or was a surety or in the nature of a surety for the bankrupt or the debtor; or
(b) shall not bring the insolvency proceedings to an end. Termination of Proceedings
35. When proceedings come to an end
(1) Where an insolvency order is not made, insolvency proceedings shall come to an
end on
(a) the withdrawal or dismissal of the petition by which the proceedings were
initiated, or
(b) the confirmation of an arrangement with creditors under section 20, or
(c) the rescission of the protection order under section 21. (2) Where an insolvency order is made the insolvency proceedings shall come to an
end on the making by the High Court of an order under section 36. 36.
2) Where an insolvency order is made the insolvency proceedings shall come to an
end on the making by the High Court of an order under section 36. 36.
Order terminating proceedings
(1) Where a bankrupt or other debtor is discharged, and,
(a) the Official Trustee has completed the distribution of the debtor’s assets
under Part Three, and
(b) the Official Trustee’s final accounts in the insolvency have been drawn up,
and have been passed by the Auditor-General,
the Official Trustee shall apply to the High Court for an order terminating the insolvency
proceedings. [Issue 1] V-1418
assed by the Auditor-General,
the Official Trustee shall apply to the High Court for an order terminating the insolvency
proceedings. [Issue 1] V-1418
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Insolvency Act, 1962
(2) The Official Trustee shall give notice of the application, together with a summary
of the final accounts, to the debtor and to every creditor with an admitted proof. (3) The Court shall grant the application if satisfied that it is duly made. Administration ofDebtor’s Property
Assets Passing to Official Trustee
37. Vesting on making of protection order
(1) On and by virtue of the making of a protection order, the movable and immovable
property vested in the debtor immediately before the order was made, shall vest in the
Official Trustee to the same extent and, subject to subsection (3), with the same incidents. (2) The property in the possession of the debtor at any time within six months before
the protection order was made shall be presumed to be vested in the debtor unless the
contrary is shown. (3) Property which has become vested in the Official Trustee under this section shall
not be subject to attachment, distress or other proceedings for the enforcement of an obli
gation against the debtor, whether founded on a judgment or not. (4) Subsection (3) does not apply to proceedings for the enforcement of a security. 38.
tion against the debtor, whether founded on a judgment or not. (4) Subsection (3) does not apply to proceedings for the enforcement of a security. 38.
After-acquired property
(1) The Official Trustee shall bring about the vesting in the Official Trustee to the
same extent and, subject to subsection (3), with the same incidents, of the after-acquired
property of the debtor except property exempted by subsection (2) or property which
would not be of value to the creditors. (2) The following after-acquired property shall be exempted, namely,
(a) property necessary for the reasonable current maintenance of the debtor,
the spouse and children of the debtor;
(b) money paid or payable to the debtor, as compensation for the diminished
earning capacity of the debtor, by way of damages for personal injury or
other lump sum;
(c) money paid or payable to the debtor by way of loan;
(d) movable property bought by the debtor and not paid for in full;
(e) property in which a property mentioned in paragraph (b), (c) or (d) of this
subsection has been directly or indirectly invested, or which otherwise
represents that property.
perty mentioned in paragraph (b), (c) or (d) of this
subsection has been directly or indirectly invested, or which otherwise
represents that property.
(3) Property which has become vested in the Official Trustee under this section is not
subject to attachment, distress or any other proceedings for the enforcement of an obliga
tion against the debtor, whether founded on a judgment or not. (4) Subsection (3) does not apply to proceedings for the enforcement of a security. V-1419 [Issue 1]
the debtor, whether founded on a judgment or not. (4) Subsection (3) does not apply to proceedings for the enforcement of a security. V-1419 [Issue 1]
ACT 153
Insolvency Act, 1962
(5) Where the debtor has, with respect to after-acquired property which is not ex
empted, entered into a transaction by which the whole or a part of the value of the prop
erty is lost to the creditors, the Official Trustee may apply to the High Court for an order
setting aside the transaction and requiring the property or its value, or that part of the
property that was lost to the creditors, to be transferred to the Official Trustee. (6) The Official Trustee may give notice to an employer, a banker or any other per
son who but for this section would be under an obligation to transfer after-acquired prop
erty which is not exempted to, or to the order of, the debtor to transfer the property in
stead to the Official Trustee, whose receipt shall be a sufficient discharge. (7) A person who fails to comply with a notice under subsection (6) shall pay to the
Official Trustee a sum of money necessary to make good a loss to the creditors arising
from the failure. 39.
ice under subsection (6) shall pay to the
Official Trustee a sum of money necessary to make good a loss to the creditors arising
from the failure. 39.
Repayments by preferred creditors
(1) Where, at any time between the making of an insolvency order and the debtor’s
discharge, it appears to the Official Trustee that, during the six months ending with the
making of the protection order and at a time when the debtor was insolvent, the debtor
(a) made a payment or other transfer of property, or
(b) created a mortgage or any other charge, or suffered a judgment or incurred
any other obligation,
with the dominant intent that any of the creditors of the debtor should benefit at the expense
of others, the Official Trustee shall give notice to the creditor so preferred requiring that
creditor, within the period specified in the notice, to restore to the Official Trustee, whether
by payment of money, transfer of property or surrender of rights, the benefit which has ac
crued to the creditor by reason of that preferment.
whether
by payment of money, transfer of property or surrender of rights, the benefit which has ac
crued to the creditor by reason of that preferment.
(2) Where an insolvency order is made against a debtor, a person who, during the
relevant period, received a payment of money, or other transfer of property, in respect of
a debt owed to that person by the debtor, shall, on receipt of a notice given in that behalf
by the Official Trustee, restore the property or its value to the Official Trustee. (3) Subsection (2) does not apply to a payment or other transfer of property,
(a) made by the debtor to the debtor’s banker, in so far as it has been subse
quently disbursed by the banker in meeting cheques drawn by the debtor;
(b) made in respect of a debt incurred during the relevant period;
(c) made in respect of a secured debt; or
(d) made on the enforcement against a third party of a guarantee or indemnity,
or of a mortgage, charge or lien on that party’s property.
red debt; or
(d) made on the enforcement against a third party of a guarantee or indemnity,
or of a mortgage, charge or lien on that party’s property.
(4) Where an insolvency order is made against a debtor, the property in the posses
sion of the sheriff at the time of the making of the protection order, being property of
which possession was taken under an execution issued by a creditor of the debtor or the
proceeds of that property, shall, after deduction of the sheriff’s and bailiff’s charges in the
execution, be transferred to the Official Trustee. (Issue 1] V - 1420
t property, shall, after deduction of the sheriff’s and bailiff’s charges in the
execution, be transferred to the Official Trustee. (Issue 1] V - 1420
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Insolvency Act, 1962
(5) Where a person complies with a notice given under subsection (1) or (2), that per
son may, within one month after the notice was given, lodge a proof of debts, or require
the Official Trustee to amend that proof, so as to enable the debt in respect of which the
notice was given to rank for dividend at the value which is appropriate in view of the
compliance. (6) For the purposes of this section “relevant period” means the period beginning
twenty-one days before the presentation of the petition on which the protection order was
made, or, if the protection order was made on two or more petitions, before the presenta
tion of the first petition, and ending with the making of the protection order. 40.
ction order was made on two or more petitions, before the presenta
tion of the first petition, and ending with the making of the protection order. 40.
Repayment of gifts
(1) Where, at any time between the making of an insolvency order and the debtor’s
discharge, it appears to the Official Trustee that the debtor made a disposition of the
debtor’s property otherwise than for full value or in settlement of a due debt, or incurred
an obligation otherwise than for full value,
(a) during the two years ending with the making of the protection order, or
(b) more than two years but less than ten yeais before the making of the pro
tection order and at a time when the debtor was insolvent,
the Official Trustee shall give notice to the person to whom the disposition was made or
for whose benefit the obligation was incurred requiring that person within the period
specified in the notice, to restore to the Official Trustee, whether by payment of money,
transfer of property or surrender of rights, the excess of the benefit which had accrued to
that person above the value of the consideration provided. (2) Excess benefit restored under subsection (1) shall be treated as a provable debt in
respect of which a proof of debts may be lodged at any time within one month after it was
restored.
section (1) shall be treated as a provable debt in
respect of which a proof of debts may be lodged at any time within one month after it was
restored.
(3) This section does not apply to a disposition made in consideration of marriage
unless the High Court is of the opinion that the disposition was made for the purpose of
defeating creditors. 41. Repayments by moneylenders
(1) Where it appears to the Official Trustee that, during the ten years ending with the
making of the protection order, a sum of money was paid or allowed by the debtor, the
Official Trustee may give notice to the lender requiring the lender, within the period
specified in the notice, to make a like repayment to the Official Trustee. (2) Subsection (1) is applicable
(a) at any time between the making of an insolvency order and the debtor’s
discharge, and
(b) in respect of a loan in circumstances which the High Court would have
ordered the lender to make repayment to the debtor, if proceedings had
been brought under section 1 of the Loans Recovery Act, 1918.5
5 . Cap. 175 of the 1951 Edition, No. 2 of 1918, it came into force on 14th March, 1918. V-1421 [Issue 1]
section 1 of the Loans Recovery Act, 1918.5
5 . Cap. 175 of the 1951 Edition, No. 2 of 1918, it came into force on 14th March, 1918. V-1421 [Issue 1]
ACT 153
Insolvency Act, 1962
42. Sums to be credited to debtor’s official account
(1) The Official Trustee shall open a debtor’s official account, within the insolvent
estates fund for each debtor in respect of whom a protection order is made. (2) There shall be credited to the debtor’s official account,
(a) the moneys received by the Official Trustee in respect of the debtor by vir
tue of sections 37 to 41;
(b) payments made to the Official Trustee in respect of the debtor either under
an order for early discharge made under section 31 or otherwise for the
purpose of increasing the assets available for dividend;
(c) repayments in respect of excess dividends made under subsection (2) of
section 54. (3) Where on the application of the debtor or a creditor it appears to the High Court
before the termination of the insolvency proceedings that assets have been lost to the es
tate by reason of a default by the Official Trustee, the Court may order that the debtor’s
official account be credited with the sum of money that may appear to the Court to be just
and that an equivalent sum of money be debited to the fees account. General Functions of Official Trustee
43.
that may appear to the Court to be just
and that an equivalent sum of money be debited to the fees account. General Functions of Official Trustee
43.
Duty to protect assets
(1) On the making of a protection order the Official Trustee
(a) shall take possession of the property which has passed to the Official Trus
tee under section 37;
(b) shall take the steps that are expedient to procure, in relation to stocks and
shares and other property transferable in the books of a body corporate or
other person which have passed to the Official Trustee under section 37,
the transfer of the property into the name of the Official Trustee;
(c) shall make the arrangements that are expedient to secure the carrying on of
a trade or business the continuance of which would be likely to benefit the
creditors;
(d) shall secure the payment to the Official Trustee or other discharge of the
debts and other obligations the right to which has passed to the Official
Trustee under section 37;
(e) shall take any other steps that are expedient to ensure the protection of the
debtor’s assets for the benefit of the creditors. (2) Until an insolvency order is made the Official Trustee shall not dispose of, or en
cumber, a property, otherwise than in the course of a trade or business, without the con
sent of the debtor or the authority of the High Court.
or en
cumber, a property, otherwise than in the course of a trade or business, without the con
sent of the debtor or the authority of the High Court.
(3) A restriction on the transferability of the property as is mentioned in para
graph (b) of subsection (1) of this section shall not be operative in the case of a transfer to
the Official Trustee. [Issue 1] V - 1422
ioned in para
graph (b) of subsection (1) of this section shall not be operative in the case of a transfer to
the Official Trustee. [Issue 1] V - 1422
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Insolvency Act, 1962
(4) The Official Trustee may, on suspecting that property is concealed, offer a re
ward, to a person who is not the debtor personally, who produces the property or gives
information leading to its discovery, but the reward shall not exceed one-twentieth of the
value of the property recovered by the action of that person. 44. Duty to realise assets
(1) On the making of an insolvency order the Official Trustee shall realise as soon as
practicable the assets not held as cash by the means and for the return that will produce
for distribution to the creditors sums of money representing the full value of the assets. (2) Subsection (1) does not require the realisation of an asset which cannot be readily
or advantageously disposed of. 45. Duty to verify debts ranking for dividend
(1) On the making of an insolvency order the Official Trustee shall take the steps that
are practicable to verify the correctness of every admitted proof.
On the making of an insolvency order the Official Trustee shall take the steps that
are practicable to verify the correctness of every admitted proof.
(2) Where an insolvency order is made, and the creditor’s obligations that are men
tioned in paragraph (b) of subsection (3) of section 15 are included in the creditor’s ad
mitted proof,
(a) the obligations shall be deemed to be cancelled at the making of the insol
vency order and the values of the debts shall be proportionally reduced, in a
case where the total value of the obligations as shown in the proof is less
than the total value of debts owed to the creditor as shown;
(b) the obligations shall be deemed to be proportionally reduced at the making
of the insolvency order by the total value of the debts in any other case, and
the proof shall be deemed to be expunged. (3) The Official Trustee may give notice to a creditor holding a security that, if the
security is not realised within the period specified in the notice, which shall not be less
than six months, it will be treated as surrendered. (4) Subject to sections 31 to 56 a debt shall rank for dividend at any time if, but only
if, it is at that time included in an admitted proof; and the value of the debt shall be taken
to be the value shown at that time in the proof. 46.
ly
if, it is at that time included in an admitted proof; and the value of the debt shall be taken
to be the value shown at that time in the proof. 46.
Duty to amend admitted proofs
(1) Where the value of a debt or security included in an admitted proof has changed
otherwise than in respect of interest accruing after the protection order was made, the
proof is subject to amendment for the purpose of altering the value shown in the proof to
give effect to the change. (2) Where a debt or security is incorrectly included in an admitted proof, or the value
of a debt or security at the date of the making of the protection order is incorrectly stated,
the proof is subject to amendment for the purpose of rectifying the incorrectness. (3) Where a creditor desires to withdraw a claim to the whole or a part of a debt in
cluded in an admitted proof, the proof is subject to amendment for the purpose of deleting
the debt or reducing its value accordingly. V -1423 [Issue 1]
uded in an admitted proof, the proof is subject to amendment for the purpose of deleting
the debt or reducing its value accordingly. V -1423 [Issue 1]
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(4) Where an admitted proof is subject to amendment under this section,
(a) the Official Trustee may, except in the case of an amendment under sub
section (3), give notice to the creditor specifying the proposed amendment
and inviting the creditor to consent to it within the period specified in the
notice; or
(b) the creditor may, if the Official Trustee has not given the creditor notice
under paragraph (a), give notice to the Official Trustee specifying the pro
posed amendment and, except in the case of an amendment under subsec
tion (3), inviting the creditor to consent to it within the period specified in
the notice. (5) Where notice of a proposed amendment is given under subsection (4), the Official
Trustee shall amend the proof accordingly if,
(a) the party to whom the notice is given consents to the amendment;
(b) consent is not given but, on an appeal by the creditor or an application by
the Official Trustee, the High Court orders the amendment to be made; or
(c) the amendment is proposed by the creditor under subsection (3). 47.
on by
the Official Trustee, the High Court orders the amendment to be made; or
(c) the amendment is proposed by the creditor under subsection (3). 47.
Duty to ascertain priority of debts
(1) On the making of an insolvency order the Official Trustee shall in relation to each
debt which ranks for dividend, ascertain into which of the following classes the whole or
a part of the debt falls:
Class A - A debt or part of a debt which answers either of the following descriptions,
namely
(a) remuneration not exceeding one hundred and fifty thousand cedis owed to an
employee of the debtor, who is not a near relative, in respect of employment
during the whole or a part of the four months preceding the making of the
protection order; or
(b) rates, taxes or similar payments owed to the Republic or a local authority
which have become due and payable within the year preceding the making
of the protection order. Class B - A debt or part of a debt which does not fall into any other class. Class C - A debt or part of a debt which does not fall within class D and is, or was at
any time within the year preceding the making of the protection order, owed to a near
relative of the debtor.
ot fall within class D and is, or was at
any time within the year preceding the making of the protection order, owed to a near
relative of the debtor.
Class D - A debt or part of a debt which answers either of the following descriptions,
namely
(a) excess benefit restored to the Official Trustee under section 40; or
(b) excess interest, that is, a portion of a debt which, whether it is stated to do
so or not, represents interest at a yearly rate in excess of seven for each
hundred. [Issue 1] V-1424
tion of a debt which, whether it is stated to do
so or not, represents interest at a yearly rate in excess of seven for each
hundred. [Issue 1] V-1424
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(2) For the purposes of subsection (1), the following are near relatives of the debtor,
namely,
(a) the spouse, parents and issue of the debtor, and
(b) brothers, sisters, uncles, aunts, nephews and nieces of the debtor, whether
of the whole or the half blood. 48. Duty to consult creditors
(1) Subject to this Act, the Official Trustee,
(a) shall report to the creditors, at intervals not greater than six months, on the
progress of the insolvency proceedings;
(b) shall consult the creditors on a matter arising in the proceedings which sub
stantially affects their interests; and
(c) shall give effect, so far as may be practicable, to the views expressed by the
creditois in relation to the realisation and distribution of assets. (2) For the purpose of complying with subsection (1), the Official Trustee may call a
meeting of creditors at any time, and shall call a meeting if required to do so by a notice
in writing signed by creditors whose votes exceed one-fifth of the total number of votes
which could be cast at the meeting. (3) The Schedule shall apply in relation to a meeting of creditors called under this
section. 49.
number of votes
which could be cast at the meeting. (3) The Schedule shall apply in relation to a meeting of creditors called under this
section. 49.
Enquiries by the High Court
(1) Where the Official Trustee is of the opinion that it is necessary, in order to enable
the Official Trustee to carry out functions under this Part in relation to a debtor, for the
debtor, a creditor or any other person to be brought before and examined by the High
Court, the Official Trustee may order the debtor, that creditor or that other person to at
tend for that purpose before the Court. (2) In proceedings under subsection (1), the Court
(a) may examine on oath or otherwise a person brought before it,
(b) may order the delivery up by that person of assets to which the Official
Trustee is entitled under this Act, and
(c) may make any other order that it thinks just. Assets Passing from Official Trustee
50. Cases where insolvency order not made
(1) Within fourteen days after an arrangement with creditors is confirmed under sec
tion 20, the Official Trustee shall, unless the Official Trustee is to act as trustee under the
arrangement, transfer the property which has become vested in the Official Trustee under
section 37 or 38 in respect of the debtor to the person entitled to the property under the
arrangement. V-1425 [Issue 1]
in the Official Trustee under
section 37 or 38 in respect of the debtor to the person entitled to the property under the
arrangement. V-1425 [Issue 1]
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(2) Within fourteen days after a protection order is rescinded under section 21, the
Official Trustee shall transfer the property which has become vested in the Official Trus
tee under section 37 or 38 in respect of the debtor back to the debtor. (3) Despite subsections (1) and (2), the Official Trustee is entitled to retain assets suf
ficient to reimburse the Official Trustee for fees and outgoings due to the Official Trustee
from the debtor in respect of the insolvency proceedings. (4) This section does not apply to property which has already passed from the Offi
cial Trustee, but it shall apply to the proceeds of property which has been realised as it
applies to property which has been retained in its original form. 51. Disclaimer
(1) Within one year after a property has become vested in the Official Trustee under
section 37, the Official Trustee, if of the opinion that the property will not be of benefit to
the creditors, may by notice published in the Gazette disclaim the property.
al Trustee, if of the opinion that the property will not be of benefit to
the creditors, may by notice published in the Gazette disclaim the property.
(2) A person interested in property vested in the Official Trustee under section 37
may by application in writing require the Official Trustee to elect whether to disclaim the
property or not to disclaim the property. (3) Subsection (2) shall not apply if the Official Trustee fails to disclaim the property
within one month after the making of the application, or within a longer period that the
High Court may allow. (4) The Court may on the application of a person interested, give a relief and make
any other provision that it thinks just in consequence of a disclaimer under this section. (5) Subject to an order made by the Court, the effect of a disclaimer is as follows:
(a) where the property consists of rights under a lease, share, contract or any
other interest, those rights or interests are void to the extent that the prop
erty affects the Official Trustee or the debtor;
(b) where the property consists of the absolute ownership of land or chattels
that ownership shall revert to the debtor. 52.
al Trustee or the debtor;
(b) where the property consists of the absolute ownership of land or chattels
that ownership shall revert to the debtor. 52.
Fees and outgoings
(1) The Official Trustee is entitled to withdraw from the property of the debtor which
has become vested in the Official Trustee sums of money sufficient to satisfy the fees of
the prescribed amount charged in respect of the costs of the administration. (2) When fees become due to the Official Trustee in respect of a debtor, the Official
Trustee shall pay them by transferring the necessary sum of money from the debtor’s
official account to the fees account. (3) When any rent, rates, charges or other outgoings fall to be met by the Official
Trustee in respect of the debtor, the Official Trustee shall pay them out of the debtor’s
official account. [Issue 1] V-1426
to be met by the Official
Trustee in respect of the debtor, the Official Trustee shall pay them out of the debtor’s
official account. [Issue 1] V-1426
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53. Return of personal effects to debtor
Within fourteen days after the debtor’s property has vested in the Official Trustee un
der section 37, the Official Trustee shall restore to the debtor any of the following that the
debtor may select, which is not of a total value exceeding five million cedis, namely,
(a) property used personally by the debtor for the purposes of the employment
of the debtor, or
(b) furniture, clothing and other household effects used by the debtor or any of
the dependents of the debtor. 54.
of the employment
of the debtor, or
(b) furniture, clothing and other household effects used by the debtor or any of
the dependents of the debtor. 54.
Dividends to creditors
(1) Subject to sections 52 and 53, the Official Trustee may as early as is practicable,
declare and distribute dividends to creditors in accordance with the following rules:
(a) provision shall be made for the payment in full of the class A debts before
a dividend is declared in respect of class B debts, and so on throughout the
classes;
(b) the debts within one class shall rank at the same rate;
(c) payments shall be made only in respect of debts which rank for dividend
and shall not exceed the values of the debts;
(d) where a security held by a creditor has not yet been realised or surrendered,
the value of the debt against which the security is held shall be treated as
reduced by the value of the security;
(e) interest shall not be allowed after the making of the protection order. (2) Where a dividend is paid under this section in respect of a debt which is subse
quently struck out or reduced in value by an amendment of the admitted proof, the credi
tor shall repay to the Official Trustee the difference between the amount of the dividend
and the amount which, in the light of the amendment, should have been paid.
to the Official Trustee the difference between the amount of the dividend
and the amount which, in the light of the amendment, should have been paid.
(3) Where a dividend is paid under this section in respect of a debt which is subse
quently increased in value by an amendment of the admitted proof, the Official Trustee
shall, so far as may be practicable without disturbing dividends already declared, pay to
the creditor the difference between the amount of the dividend and the amount which, in
the light of the amendment, should have been paid. (4) Where a creditor has omitted to lodge a proof of debts during the period allowed
by this Act, or has omitted a provable debt from that proof, the creditor may at any time
during the insolvency proceedings apply to the High Court for relief, and if the Court is
of the opinion that the omission was excusable it shall make an order requiring the Offi
cial Trustee, so far as may be practicable without disturbing dividends already declared,
to pay to the creditor the sums of money that would have been payable to the creditor
under this section if the omission had not occurred.
y declared,
to pay to the creditor the sums of money that would have been payable to the creditor
under this section if the omission had not occurred.
(5) Where, at the end of one year following the declaration of a dividend stated by
the Official Trustee to be the final dividend, the payments under that or a previous divi
dend remain outstanding because the creditors in question cannot be found, the Official
Trustee shall cancel the payments and, unless payment in full has been achieved, shall
declare a further dividend in favour of the remainder of the creditors. V -1427 [Issue 1]
ayments and, unless payment in full has been achieved, shall
declare a further dividend in favour of the remainder of the creditors. V -1427 [Issue 1]
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(6) In the case of a final dividend, or a further dividend declared under subsection (5)
payment of less than ten thousand cedis shall not be required to be made. (7) Payments under this section shall be in money drawn from the debtor’s official
account. (8) For the purposes of subsection (7), property which has not been converted into
money may be transferred to a creditor in lieu of the equivalent amount of money if the
creditor consents. 55. Return of surplus assets to debtor
(1) Where, after provision has been made for the payments and transfers of property
required to be made under sections 52, 53 and 54, a balance remains in the debtor’s offi
cial account, the Official Trustee shall pay that balance to the debtor. (2) Where, after the provision that is referred to in subsection (1) has been made, the
Official Trustee retains property which has not been converted into money, the Official
Trustee shall transfer that property to the debtor. (3) Where the debtor cannot be found, the High Court may direct that balance to be
transferred to the fees account, and may give directions for the disposal of that property. 56.
be found, the High Court may direct that balance to be
transferred to the fees account, and may give directions for the disposal of that property. 56.
Payments to be made out of debtor’s property
(1) A person is not entitled to a payment in respect of anything done by the Official
Trustee in relation to a debtor except out of a balance in the debtor’s official account or
out of assets otherwise vested in the Official Trustee in respect of the debtor under this
Part. (2) For the purposes of subsection (1), where in any proceedings costs are given
against the Official Trustee they shall be met out of the fees account. (3) During the continuance of insolvency proceedings, a person shall not be required,
under a contract entered into with the debtor before the protection order was made, to
supply goods, render services or otherwise perform an obligation unless that person has
received an assurance in writing from the Official Trustee that the debtor’s estate is suffi
cient to enable the goods or services to be paid for, or the performance of the obligation
otherwise recompensed, in accordance with the terms of the contract. (4) Despite subsection (1), where an assurance given under subsection (3) proves in
correct the person to whom the assurance was given is entitled to be reimbursed out of
the fees account.
ssurance given under subsection (3) proves in
correct the person to whom the assurance was given is entitled to be reimbursed out of
the fees account.
Arrangements with Creditors apart from Insolvency Proceedings
57. Arrangements to which sections 57 to 61 apply
This section and sections 58 to 61 apply to an arrangement with creditors made by an
insolvent debtor, who is not a body corporate, whether in writing or orally,
(a) if the arrangement is made at a time when insolvency proceedings are not
in progress against the debtor; and
[Issue 1] V -1428
writing or orally,
(a) if the arrangement is made at a time when insolvency proceedings are not
in progress against the debtor; and
[Issue 1] V -1428
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(b) if the debts subject to the arrangement amount to at least five million cedis
and constitute the whole, or substantially the whole of the debtor’s indebt
edness at the time when the arrangement is made. 58. Arrangements register
(1) The Official Trustee shall make and keep an arrangements register in which shall
be recorded the prescribed particulars of instruments lodged with the Official Trustee
under section 59. (2) Where the Official Trustee is satisfied that an arrangement recorded in the ar
rangements register has been fully carried out, or has otherwise ceased to have effect, the
Official Trustee shall record the fact in the register. (3) The arrangements register and copies of instruments recorded in that register shall
be open during working hours for public inspection on payment of the prescribed fee. (4) On an application made by a person in the prescribed form, and on payment of
the prescribed fee, the Official Trustee shall provide copies of an entry in the arrange
ments register or an instrument recorded in that register. 59.
he prescribed fee, the Official Trustee shall provide copies of an entry in the arrange
ments register or an instrument recorded in that register. 59.
Arrangements voidable unless registered
(1) An arrangement to which a provision of sections 57 to 61 applies is voidable
unless, within fourteen days after the arrangement has become binding on the debtor, two
copies of the instrument embodying the arrangement, or, where the arrangement was oral,
of an instrument recording the details of the arrangement, have been lodged with the Of
ficial Trustee for entry in the arrangements register. (2) Where, on an application by the Official Trustee or a person interested, it appears
to the High Court that an arrangement is voidable by virtue of subsection (1), the Court
shall declare the arrangement to have been void from the beginning, or from a later date
that may appear just, unless it considers that the failure to register was neither wilful nor
negligent. (3) An arrangement which is voidable by virtue of subsection (1) shall not on that
ground be avoided otherwise than by the Court under subsection (2). (4) Where an arrangement is declared void under this section the Court may make a
protection order against the debtor and this Act shall apply as if the protection order had
been then made on a creditor’s petition by the Official Trustee.
tion order against the debtor and this Act shall apply as if the protection order had
been then made on a creditor’s petition by the Official Trustee.
60. Setting aside of arrangement
(1) Where, on the application of a person interested, it appears to the High Court, as
respects an arrangement to which a provision of sections 57 to 61 applies, and which is
not an arrangement subject to avoidance under section 59,
(a) that default has been made in carrying the arrangement into effect,
(b) that for a reason it is impracticable or would be unjust to proceed with the
arrangement, or
(c) that the agreement of creditors to the arrangement was procured by fraud,
the Court may set aside the arrangement but without prejudice to anything previously
done under the arrangement. V -1429 [Issue 1]
procured by fraud,
the Court may set aside the arrangement but without prejudice to anything previously
done under the arrangement. V -1429 [Issue 1]
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(2) Where an arrangement is set aside under subsection (1), the Court may make a
protection order against the debtor and this Act shall apply as if the protection order had
been then made on a creditor’s petition by the Official Trustee. 61. Arrangement not to count as suspension of payments
Where an arrangement is duly registered under a provision of sections 57 to 61, nei
ther the arrangement itself nor an act done for the purpose of entering into the arrange
ment shall be treated as falling within paragraph (a) of subsection (1) of section 9 for the
purpose of founding a petition for a protection order against the debtor. Modifications in Special Cases
62. Debtors not of full age and capacity
(1) Subject to this section, this Act shall apply in relation to debtors who have not at
tained the age of twenty-one years in the same manner as it applies in relation to debtors
who have attained the age of twenty-one years.
have not at
tained the age of twenty-one years in the same manner as it applies in relation to debtors
who have attained the age of twenty-one years.
(2) Where a debtor has not attained the age of twenty-one years or is of unsound
mind the High Court may, on the application of the Official Trustee or a person inter
ested, appoint a person to act as the debtor’s guardian in the insolvency proceedings. (3) In the case of a debtor who is of unsound mind this Act shall apply in relation to
property vested in a person as committee of the debtor or otherwise on the debtor’s behalf
as it applies in relation to property vested in the debtor. 63. Joint debtors
(1) Where insolvency proceedings are instituted in respect of two or more debtors
jointly, debts not owed jointly by those debtors shall be disregarded for the purpose of
section 9 or 10.
instituted in respect of two or more debtors
jointly, debts not owed jointly by those debtors shall be disregarded for the purpose of
section 9 or 10.
(2) Where a protection order is made in respect of two or more debtors jointly,
(a) a petition pending against any of the debtors individually shall lapse;
(b) subject to this section, the insolvency proceedings shall extend to debts
owed by the debtors separately as well as to their joint debts, and assets of
the debtors shall vest in the Official Trustee whether or not they are refer
able to the joint debts;
(c) in addition to the joint official account opened under section 42, a separate
official account shall be opened in respect of each debtor, in which shall be
entered items referable to that debtor’s separate estate and separate debts. (3) Where an insolvency order is made in respect of two or more debtors jointly,
(a) the joint estate shall be applicable in the first instance in payment of the
joint debts, and if there is a surplus of the joint estate it shall be dealt with
as part of the respective separate estates in proportion to the interest of each
debtor in the joint estate;
[Issue 1] V -1430
it shall be dealt with
as part of the respective separate estates in proportion to the interest of each
debtor in the joint estate;
[Issue 1] V -1430
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(b) the separate estate of each debtor shall be applicable in the first instance in
payment of that debtor’s separate debts and if there is a surplus of a sepa
rate estate it shall be dealt with, so far as may be necessary for satisfying
the joint debts, as part of the joint estate. 64. Debtors who are trustees
(1) Where a debtor in respect of whom an insolvency order is made, whether person
ally or jointly with any other person or persons, is a trustee of a property, and the debtor’s
interest in the property as trustee has become vested in the Official Trustee under this
Act, then,
(a) where the debtor had a beneficial interest in the property, the Official Trus
tee shall continue to act as trustee in place of the debtor until the beneficial
interest has been realised;
(b) subject to paragraph (a), the Official Trustee shall within twenty-one days
take steps to secure the appointment of another trustee in place of the Offi
cial Trustee or, where there are two or more remaining trustees, to retire
from the trust. (2) This Act does not affect the beneficial interest of a person other than the debtor in
trust property.
emaining trustees, to retire
from the trust. (2) This Act does not affect the beneficial interest of a person other than the debtor in
trust property.
(3) For the purposes of this section “trustee” includes a personal representative or
any other person holding property on a fiduciary basis, and “trust property” shall be
construed accordingly. 65. Participation in insolvency proceedings by subsequent creditors
(1) Where an insolvency order is made but the insolvency proceedings have not yet
come to an end, any one or more creditors of the debtor may, on payment of the pre
scribed fee, apply to the Official Trustee for the making of a participation order, enabling
that creditor or those creditors to participate in the insolvency proceedings in respect of
new debts. (2) An application under subsection (1) shall not be made unless,
(a) the debtor’s indebtedness to the applicant, or to the applicants collectively,
comprises new debts in liquidated sums payable immediately and amount
ing to at least two hundred and fifty thousand cedis; and
(b) debts amounting to at least two hundred and fifty thousand cedis remain
unpaid fourteen days after the service on the debtor of a written demand for
payment.
mounting to at least two hundred and fifty thousand cedis remain
unpaid fourteen days after the service on the debtor of a written demand for
payment.
(3) Sections 11, 13, 15, and 16 shall apply as nearly as may be in relation to an appli
cation under subsection (1) subject to the following modifications, namely,
(a) references to a petition shall be read as references to the application;
(b) references to a protection order shall be read as references to a participation
order. V-1431 (Issue 1]
be read as references to the application;
(b) references to a protection order shall be read as references to a participation
order. V-1431 (Issue 1]
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(c) sections 13 and 15 shall not apply to debts which are new debts, and the
period within which a proof of debts may be lodged shall be limited to
three months from the making of the participation order;
(d) in section 16, the reference to an arrangement with creditors in subsec
tion (2), subsection (3), and subsection (5) shall be omitted.
tion order;
(d) in section 16, the reference to an arrangement with creditors in subsec
tion (2), subsection (3), and subsection (5) shall be omitted.
(4) Sections 37 to 56 shall apply as nearly as may be in relation to a participation or
der, subject to the following modifications, namely,
(a) references to a protection order or an insolvency order shall be read as ref
erences to the participation order;
(b) the Official Trustee shall open a participation account within the debtor’s
official account, to which shall be credited the proceeds of the after
acquired property which becomes vested in the Official Trustee after the
making of the participation order and before any other subsequent order is
made, together with any other moneys which become vested in the Official
Trustee by virtue of the participation order;
(c) subject to section 52, the participation account shall be used only for the
payment of dividends in respect of debts ranking for dividend by virtue of
the participation order, and dividends in respect of those debts shall be paid
out of the participation account;
(d) where there is a surplus on the participation account and a deficiency on
the debtor’s main account, or a surplus on the main account and a defi
ciency on the participation account, the surplus shall be transferred to the
credit of the main account or the participation account;
(e) where more than one participation order has been made a surplus shall be
dealt with on the principle that the main account is to be credited in prefer
ence to a participation account and an earlier participation account is to be
credited in preference to a later participation account.
dited in prefer
ence to a participation account and an earlier participation account is to be
credited in preference to a later participation account.
(5) Where a participation order is made,
(a) if the debtor is a bankrupt and the appointed discharge date is less than two
years ahead, then, subject to sections 31 and 32, it shall be postponed to the
date two years after the participation order is made;
(b) if the debtor is not a bankrupt and has not been discharged from the insol
vency order, then, subject to sections 23 and 31, the appointed discharge
date shall be postponed to the date two years after the participation order is
made;
(c) if the debtor has been discharged from the insolvency order and, where
applicable, from bankruptcy, the discharge shall be treated as revoked, and,
(i) subject to sections 23, 31 and 32, the appointed discharge date shall
be the date two years after the participation order is made;
(ii) the debtor shall surrender the certificate of discharge to the Official
Trustee;
(iii) the debtor shall not be treated as having contravened section 24, 26,
or 27 by reason of an act done by the debtor between discharge and
the revocation of the order. [Issue 1] V-1432
as having contravened section 24, 26,
or 27 by reason of an act done by the debtor between discharge and
the revocation of the order. [Issue 1] V-1432
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(6) For the purposes of this section “new debt” means a debt incurred by the debtor
since the making of the protection order or, if the participation order is a second or sub
sequent participation order, means a debt incurred by the debtor since the making of the
last participation order. Administration ofEstates ofDeceased Insolvents
66. Administration orders
(1) Where the estate of a deceased debtor is insufficient to pay the debts of the de
ceased debtor the representative or a creditor of the deceased may, on payment of the
prescribed fee, apply to the Official Trustee for the making of an administration order, for
the administration of the estate under sections 67 to 73. (2) Where an application under subsection (1) is made by a creditor, the applicant shall
at the same time serve a copy of the application on the representative of the deceased.
nder subsection (1) is made by a creditor, the applicant shall
at the same time serve a copy of the application on the representative of the deceased.
(3) After seven days have elapsed following the making of the application, the Offi
cial Trustee shall consider the application and evidence in support of the application, to
gether, in the case of a creditor’s application, with any representations made by the repre
sentative of the deceased, and if the Official Trustee considers
(a) that the application was duly made, the Official Trustee shall make an ad
ministration order on the application; or
(b) that the application was not duly made, the Official Trustee shall give notice
to the applicant and, in the case of a creditor’s application, to the representa
tive of the deceased that the application is dismissed. (4) References in this section and sections 67 to 73 to the representative of a deceased
debtor shall be construed as references to the personal representative of the deceased debtor
or, if the deceased debtor does not have a personal representative and was subject to cus
tomary law, as references to the successor under customary law. (5) Where there is no representative of the deceased, provisions of sections 67 to 73
requiring anything to be done by or in relation to the representative shall not apply. 67.
esentative of the deceased, provisions of sections 67 to 73
requiring anything to be done by or in relation to the representative shall not apply. 67.
Effect of administration order
(1) On and by virtue of the making of an administration order there shall vest in the
Official Trustee to the same extent and, subject to subsections (2), (3), (4) and (5), with
the same incidents, the movable and immovable property which, immediately before the
order was made, was vested for the purposes of the administration of the deceased’s es
tate in the personal representative, or, by virtue of [section 1 of the Administration of
Estates Act, 1961 (Act 63)], in the Chief Justice; and the representative shall not have a
right of retainer in respect of debts owed to that representative. (2) Property which has become vested in the Official Trustee under subsection (1) is
not subject to attachment, distress or any other proceedings for the enforcement of an
obligation against the debtor’s estate, whether founded on a judgment or not. (3) Subsection (2) does not apply to proceedings for the enforcement of a security. V-1433 (Issue 1]
r’s estate, whether founded on a judgment or not. (3) Subsection (2) does not apply to proceedings for the enforcement of a security. V-1433 (Issue 1]
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(4) The administration order shall not affect the validity of a realisation or distribu
tion of assets made by the representative or any other act of administration done by the
representative before the receipt of notice of the making of the administration order. (5) Within seven days after the making of an administration order, or a longer period
allowed by the Official Trustee, the representative of the deceased shall lodge with the
Official Trustee a copy of any will left by the deceased, whether or not it has been admit
ted to probate, and a statement containing,
(a) particulars of the assets of the deceased,
(b) a list of creditors, showing the amounts and due dates of debts and particu
lars of securities held,
(c) a description of the steps already taken by the representative by way of
realising and distributing the assets, and
(d) a description of the funeral, testamentary or administration expenses
incurred. 68. Creditor’s proof of debts
(1) During the period of three months following the making of an administration or
der a creditor of the deceased may lodge with the Official Trustee a proof of debts, in
accordance with subsection (2).
making of an administration or
der a creditor of the deceased may lodge with the Official Trustee a proof of debts, in
accordance with subsection (2).
(2) A proof of debts shall be in two parts, the first part containing brief particulars of
(a) the amount outstanding of a debt owed to the creditor by the deceased’s
estate;
(b) the amount outstanding of a debt owed by the creditor to the deceased’s
estate;
(c) the nature and value of any securities held by the creditor, or held on behalf
of the deceased’s estate, in respect of those debts,
and the second part containing details of the transactions from which the debts arose. (3) The Official Trustee shall give a copy of the first part of a proof lodged under
subsection (1) to the representative of the deceased and to each creditor who is mentioned
in the statement lodged by the representative or who, not being so mentioned, lodges a
proof; and if the representative knows or believes that the proof is false in a material par
ticular the representative shall inform the Official Trustee of that particular within four
teen days.
ieves that the proof is false in a material par
ticular the representative shall inform the Official Trustee of that particular within four
teen days.
(4) The Official Trustee shall examine the proof of debts lodged by a creditor and if,
after considering the representations made by the representative or a creditor, it appears
to the Official Trustee that an item is improperly included or a value incorrectly stated or
that the proof is otherwise incorrect, the Official Trustee shall give notice of the objection
to the creditor, who may lodge an amended proof within the period specified in the notice
or an extended period allowed by the Official Trustee. (5) Where it does not appear that a proof is incorrect the Official Trustee shall give
notice to the creditor regarding the admission of the proof subject to verification under
section 45. [Issue 1] V-1434
the Official Trustee shall give
notice to the creditor regarding the admission of the proof subject to verification under
section 45. [Issue 1] V-1434
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(6) Where the creditor fails to lodge an amended proof or a further amended proof,
within the period allowed under subsection (4) and the Official Trustee is still of opinion
that the previous proof is incorrect the Official Trustee shall give notice to the creditor of
the rejection of the proof. 69. First meeting of creditors
(1) The Official Trustee shall call a first meeting of creditors for a date not less than
six and not more than eight weeks after the publication of an administration order, and
shall give notice of the meeting as may be practicable to each creditor who is mentioned
in the representative’s statement or who, not being so mentioned, had lodged a proof of
debts. (2) So far in advance as may be practicable, the Official Trustee shall give to a credi
tor a copy of the representative’s statement, together with the observations on the state
ment that the Official Trustee may wish to make. (3) The Schedule shall apply in relation to the meeting. 70.
ether with the observations on the state
ment that the Official Trustee may wish to make. (3) The Schedule shall apply in relation to the meeting. 70.
Duties of deceased’s representative
(1) In addition to the specific duties imposed on the representative of the deceased by
or under this Act, it is the general duty of the representative, during the period between
the making of an administration order and the termination of the administration, to com
ply as promptly and fully as is practicable with a direction given by the Official Trustee
in connection with the performance of the functions of office as to the deceased’s estate. (2) During the period specified in subsection (1), the representative
(a) shall attend every meeting of creditors called by the Official Trustee and
give the information to the meeting that may be required by the chairman;
(b) shall as soon as is practicable, give notice to the Official Trustee of a
change in the name or address of the representative;
(c) shall not destroy, alter, conceal or dispose of an account-book or any other
record of the deceased’s financial affairs. 71. Application of sections 37 to 56
(1) Where an administration order has effect sections 37 to 56 shall apply as nearly as
may be for the purposes of the administration, subject to the modifications set out in this
section.
effect sections 37 to 56 shall apply as nearly as
may be for the purposes of the administration, subject to the modifications set out in this
section.
(2) The following provisions shall be omitted, namely,
(a) sections 37 and 38 (which deal with vesting of property);
(b) subsection (2) of section 43 (which restricts the disposition of property by
the Official Trustee);
(c) section 50 (which relates to divesting of assets where an insolvency order is
not made);
(d) section 53 (which provides for the return of personal effects to a debtor);
and
(e) section 55 (which requires surplus assets to be returned to the debtor). V-1435 [Issue 1]
des for the return of personal effects to a debtor);
and
(e) section 55 (which requires surplus assets to be returned to the debtor). V-1435 [Issue 1]
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(3) Except where the context otherwise requires, the following adaptations shall be
made, namely,
(a) references to the debtor shall be read as references to the representative of
the deceased;
(b) references to section 37 shall be read as references to section 67;
(c) references to a protection order or an insolvency order shall be read as ref
erences to an administration order;
(d) references to the debtor’s discharge shall be read as references to the termi
nation of the administration. (4) The Official Trustee shall cause the funeral, testamentary and administiation ex
penses incurred by the representative to be met out of the deceased’s official account in
priority to any other payments. (5) Funeral expenses in excess of one million cedis shall rank as a class D debt.
f the deceased’s official account in
priority to any other payments. (5) Funeral expenses in excess of one million cedis shall rank as a class D debt.
(6) Where, after provision has been made for payments and transfers of property re
quired to be made by virtue of subsections (1), (2), (3), (4) and (5), a balance remains in
the deceased’s official account, the Official Trustee shall within fourteen days pay that
balance,
(a) to the representative of the deceased, who shall deal with it as property of
the deceased’s estate; or
(b) to the Administrator-General, who shall deal with it as unrepresented estate
if there is no representative of the deceased. 72. Order terminating administration
(1) Where an estate is administered under sections 66 to 73 and,
(a) the Official Trustee has duly completed the distribution of the assets of the
deceased, and
(b) the Official Trustee’s accounts in the administration have been drawn up,
and have been passed by the Auditor-General,
the Official Trustee shall apply to the High Court for an order terminating the
administration. (2) The Official Trustee shall give notice of the application, together with a summary
of the accounts in the prescribed form, to the representative and to every creditor with an
admitted proof. (3) The Court shall grant the application if satisfied that it is duly made. 73.
, to the representative and to every creditor with an
admitted proof. (3) The Court shall grant the application if satisfied that it is duly made. 73.
Death of debtor during insolvency proceedings
(1) This section applies where a debtor in respect of whom insolvency proceedings
have been instituted dies before the proceedings have come to an end. (2) The proceedings shall lapse where the death occurs either before a protection or
der is made or while a protection order has effect, and in the latter case property vested in
the Official Trustee by virtue of the protection order shall devolve in accordance with
section 1 of the Administration of Estates Act, 1961 (Act 63). [Issue 1] V -1436
ee by virtue of the protection order shall devolve in accordance with
section 1 of the Administration of Estates Act, 1961 (Act 63). [Issue 1] V -1436
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Insolvency Act, 1962
(3) Where the death occurs after an insolvency order is made the proceedings shall
continue except so far as they concern the debtor personally, as if a participation order is
made immediately before the death, and,
(a) an administration order shall not be made in respect of the deceased;
(b) the deceased’s representative shall be subject to subsection (5) of sec
tion 67 and to section 70, as if references in those provisions to the making
of an administration order were references to the death;
(c) in relation to the disposal of surplus assets, subsection (6) of section 71 shall
apply in place of section 55;
(d) in relation to the termination of the proceedings, section 72 shall apply in
place of section 36;
(e) in relation to funeral, testamentary and administration expenses incurred by
the deceased’s representative, subsection (4) and (5) of section 71 shall apply. Supplemental Provisions
14.
y and administration expenses incurred by
the deceased’s representative, subsection (4) and (5) of section 71 shall apply. Supplemental Provisions
14.
Offences
(1) A person who does an act in contravention of a duty imposed on that person as a
debtor or as the representative of a deceased debtor by or under this Act commits an of
fence and is liable on summary conviction to a fine not less than seven hundred and fifty
penalty units. (2) Subsection (1) is without prejudice to the power of the High Court to issue a war
rant in relation to a debtor under section 28 of this Act, or to punish a person for con
tempt of Court or for an offence under the Criminal Offences Act, 1960 (Act 29). 75. Evidence
A register kept, notice published or certificate given under this Act is prima facie evi
dence of the matters stated in that document. 76. Rules
(1) The Minister responsible for Justice may, by legislative instrument, make Rules,
other than Rules of Court, providing for a matter which under this Act is to be prescribed
or provided for by rules or which otherwise relates to procedure under this Act.
ourt, providing for a matter which under this Act is to be prescribed
or provided for by rules or which otherwise relates to procedure under this Act.
(2) Where it appears to the Minister that any of the monetary limits specified in sec
tions 9, 10, 57 and 65 should be altered the Minister may, by legislative instrument, make
the amendments in this Act that are necessary for effecting the alteration. 77. Interpretation
In this Act, unless the context otherwise requires,
“ address” includes place of residence, place of business, an electronic address
and a post office box number habitually used;
V-1437 [Issue 1]
uires,
“ address” includes place of residence, place of business, an electronic address
and a post office box number habitually used;
V-1437 [Issue 1]
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“admitted proof’ means a proof admitted under subsection (7) of section 15 or
subsection (5) of section 68;
“after-acquired property” has the meaning assigned to it by subsection (2) of
section 26;
“application for judicial consideration” means an application made by the Offi
cial Trustee under subsection (1) of section 17;
“appointed discharge date” has the meaning assigned to it by subsection (3) of
section 30;
“ arrangement with creditors” means a contract between a debtor and the credi
tors of the debtor under which, with a view to the payment of debts in whole or in
part, the creditors agree not to exercise, or agree to defer or modify the exercise of,
any of their rights in respect of the debtor;
“bankrupt” means a person who has been adjudged a bankrupt under section 23
and has not been discharged;
“civil proceedings” includes proceedings, other than criminal proceedings or pro
ceedings under this Act, in or on the order of a Court, and the levying of distress, or
the attachment of a debt, without a Court order;
“fees account” means the account established by subsection (2) of section 3;
“fund” means the insolvent estate fund established by section 3;
“ground for bankruptcy” means any one or more of the grounds specified in
subsection (1) of section 23;
“insolvent” means unable to pay debts as they fall due;
“insolvency proceedings” means the procedural steps taken by a petition to the
Official Trustee for the making of a protection or any other order under this Act;
“insolvency register'” means the register made and kept by virtue of subsec
tion (1) of section 4;
“ name” in relation to a debtor includes a name under which the debtor carries on
a business, whether personally or with other persons;
“official account” in relation to a debtor means the account opened in respect of
the debtor under section 42;
“Official Trustee” includes the person appointed as the Official Trustee under the
[Public Trustee Ordinance, 1952 (No.
f
the debtor under section 42;
“Official Trustee” includes the person appointed as the Official Trustee under the
[Public Trustee Ordinance, 1952 (No.
24)] and a public officer authorised in terms of
subsection (2) of section 1;
“payment in full” means the making of provision for the payments and transfers
of property which in the circumstances are required to be made under sections 52
to 54;
“prescribed” means prescribed or required to be provided for under this Act, or
prescribed by Rules made under subsection (1) of section 76;
[Issue 1] V -1438
bed” means prescribed or required to be provided for under this Act, or
prescribed by Rules made under subsection (1) of section 76;
[Issue 1] V -1438
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Insolvency Act, 1962
“protection order” means an interim order made pursuant to subsection (1) of
section 8;
“provable debt” has the meaning assigned to it by subsection (1) of section 15;
“Rules” means the Rules made under section 76;
“security” means a mortgage, charge or lien on the property of the debtor for secur
ing payment of a debt, and “secured creditor” and “secured debt” shall be construed
accordingly. 78. Commencement
(1) This Act shall come into operation on the date that the Minister responsible for
Justice may, by legislative instrument, appoint, and different dates may be appointed for
different provisions. (2) A provision of this Act shall apply in relation to matters arising before the com
mencement of that provision as it applies in relation to matters arising after the
commencement. (3) An act done or suffered before the commencement of sections 8 to 36 shall be
taken into account in considering whether grounds for bankruptcy exist under para
graph (a) or (h) of subsection (1) of section 23. (4) Sections 57 to 61 shall not apply to an arrangement with creditors made before
the commencement of those sections.
f subsection (1) of section 23. (4) Sections 57 to 61 shall not apply to an arrangement with creditors made before
the commencement of those sections.
SCHEDULE
[Section 16 (6)]
Meetings of Creditors
1. A meeting of creditors is not competent to act for a purpose unless at least three creditors
with admitted proofs, or those creditors if there are less than three, are present either in person
or by representatives holding proxies. 2. Where a quorum is not present within half an hour after the time appointed for a meeting
of creditors, the Official Trustee shall adjourn the meeting to a date that the Official Trustee
may determine, which is not less than seven and not more than fourteen days after that meet
ing; and if a quorum is still not present within half an hour after the time appointed for the
adjourned meeting, the meeting shall be taken to be cancelled. 3. The cancellation of a meeting under paragraph (2) shall not prevent the High Court from
considering and determining a matter as if the meeting had been held and closed on the day on
which it was cancelled, but this paragraph does not authorise the Court to confirm an ar
rangement with creditors which has not been approved by the first meeting of creditors. 4. The Official Trustee shall preside at a meeting of creditors. 5.
ment with creditors which has not been approved by the first meeting of creditors. 4. The Official Trustee shall preside at a meeting of creditors. 5.
At a meeting of creditors each creditor with an admitted proof is entitled to be heard either
in person or by a representative holding a proxy. V-1439 (Issue 1]
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Insolvency Act, 1962
6. (1) Except where this Act otherwise provides, questions at a meeting of creditors shall be
decided by a simple majority of the votes cast.
(2) Each creditor with an admitted proof is entitled to one vote for each complete ten
thousand cedis of the net amount of the debt owed to that creditor as shown in the proof at the
time when the meeting opens.
(3) For voting purposes the net amount of a debt shall be calculated by deducting the
following amounts, from the total value of the debts owed to the creditor, namely,
(a) the total value of securities held by the creditor;
(b) the total value of obligations outstanding in the debtor’s favour against the
creditor;
(c) the amount of every dividend to which the creditor has become entitled.
(Issue 1] V-1440Have questions about this law?
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