The Receiving Order.—Upon the presentation of a petition by the debtor himself, the Court will make a receiving order forthwith. The Court will also do so in the case of a creditor's petition upon being satisfied with the proofs required. The effect of a receiving order is not to divest the debtor of his property ; its operation being simply its protection. Except as afforded by the bankruptcy procedure no creditors to whom the debtor is indebted in respect of any debt provable in bankruptcy has there after any remedy against the property or person of the debtor in respect of such debt ; nor may he commence any action or other legal proceedings except by leave of the Court. Legal proceedings that may be then pending against the debtor may be continued unless they are stayed in terms by the receiving order ; and secured creditors may proceed to realise their securities. But executions already levied must be withdrawn ; no committal order will be made on a judgment summons ; and if any warrants for arrest are out against the debtor in respect of debt, such warrants cannot be exe cuted. But a person in prison for rates cannot be discharged because of a receiving order. Notice of the order is advertised in the London Gazette, and the production of the latter paper containing such advertisement is conclusive evidence that the order has been duly made, and as to its date. Shown to a bailiff, his hand will be stayed. Unless the estate is to be administered in a summary manner, advertisements that the receiving order has been made are inserted in such local papers as the Board of Trade may direct; but in default of such direction, the official receiver makes the selection of the papers in which the notice is :3 be advertised. A sealed copy of the order must be served upon the debtor. The Court may amend the receiving order, and will annul or rescind it where a majority of the creditors in number and value are resident in Scotland or Ireland. To obtain annulment or rescission for this reason, application must be made to the Court, and notice of the intended application, together with copies of affidavits in support thereof, served upon the official receiver at least seven days before the day fixed for the hearing of the application. A receiving order made against a firm is of the same effect as if it had been made against each one of the persons who, at its date, was a partner in the firm. After the receiving order has been made, the Court may from time to time order that for such time, not exceeding three months, as the Court may think fit the debtor's letters shall be re-directed and delivered through the Post-Office to the official receiver, or the trustee of the debtor's estate, or otherwise as the Court may direct.
Merely because a receiving order has been made, the debtor is neither divested of his property, as we have already seen, nor is he made a bankrupt. As a plaintiff he may sue, even without giving security for costs; but whatever he may recover by his action must be handed over to the official receiver for the benefit of his creditors.
Statement of affairs.—A receiving order having been made, the debtor will receive a circular from the official receiver drawing attention to certain provisions of the Bankruptcy Act and Rules, and in particular requiring a statement of the debtor's affairs. Such a statement of affairs should be made out and submitted to the official receiver. It must be verified by affidavit, and show the particulars of the debtor's assets, debts, and liabilities, with the names; addresses, and occupations of his creditors. The securities held by the creditors should be described, with the dates when they were given ; also such further or other information will have to be furnished as the official receiver may from time to time require. The statement of affairs
is required to be submitted within the following times, namely—(i.) If the receiving order is made on the petition of the debtor, within three days from the date of the order ; (ii.) if the order is made on the petition of a creditor, within seven days from the date of the order. But the Court may in either case, for special reasons, extend the time. If the debtor should fail without reasonable excuse to furnish his statement, the Court may, on the application of the official receiver, or of any creditor, adjudge him bankrupt. Every debtor will be furnished by the official receiver with instructions for the preparation of his statement. It should be made out in duplicate, one copy of which must be sworn to. It is evidence against the debtor on a criminal charge.
If the debtor cannot himself properly prepare the statement, the official receiver will provide him with competent assistance, the remuneration for which will be a prior claim upon the estate. In partnership cases, each member of the firm must submit a statement of his own separate affairs, in addition to the statement relating to the affairs of the partnership. The statement may, at all reasonable times, be inspected at the office of the official receiver, and copies taken thereof, by any person who states himself in writing to be a cretor of the debtor. This may equally be done by an agent of a creditor; Alt it will be a punishable contempt of Court for any person to untruthfully state himself to be a creditor.
As soon as convenient after the receiving order has been made, the official receiver will require the attendance at his offices of the debtor. The latter will 133 then asked a series of questions relating to his affairs, the scope and ingenuity of which will probably astonish him. These questions follow an official precedent, printed and circulated by the Board of Trade under the provisions of Bankruptcy Rule 347. Apart from sub-questions and queries incidental to main questions, they number more than fifty—too many to allow of insertion in so necessarily a brief article as the present. A copy may, however, be seen in any standard work on Bankruptcy Law, and reference should be made thereto by any person who has in front of him the possibility of his own bankruptcy and this incidental ordeal. A perusal thereof will show him how absolutely futile will be all attempts to hoodwink the Court or his creditors with regard to his estate and his dealings with it. His occupations, places of business and of residence, partnerships, and books of accopnt during the previous six years will have to be disclosed. So also all nioiltgages, charges, pledges, deposits, and assignments of any part of his estate ; when first he became aware of his insolvency, and the expectation he then had of paying his debts ; his household and personal expenditure, and his income during the preceding three years ; and any settlement he may have made during the preceding ten years, the dates and particulars thereof, and his financial position at the time of so making. In addition to these matters, and amongst many others, the debtor will be narrowly cross examined as to his property, whether in possession, reversion, remainder, or in expectancy. This catechism will be gone through privately with the official receiver, who will take down all the answers and require the debtor's signature thereto.