Property of a bankrupt.—The property so vested as the result of an adjudication will pass from official receiver to trustee and from trustee to trustee, and vest in them for the time being during continuance of office without any conveyance, assignment, or transfer whatever. But the following property is excluded from that which passes upon adjudication for the benefit of the creditors :—(i.) Property held by the bankrupt in trust for any person. (ii.) The tools of his trade and the necessary wearing apparel and bedding of himself, his wife and children, to a value, inclusive of tools, apparel, and bedding, not exceeding .220 in the whole. It comprises, however, the following : (i.) All such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, or may be acquired by or devolve on him before his discharge.
(ii.) The capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the bankrupt for his own benefit at the commencement of his bank ruptcy, or before his discharge, except the right of nomination to a vacant ecclesiastical benefice.
(iii.) All goods being, at the commencement of the bankruptcy, in the possession, order, or disposition of the bankrupt, in his trade or business, by the consent and permission of the true owner, under such circumstances that he is the reputed owner thereof: provided that things in action other than debts due or growing due to the bankrupt in the course of his trade or business, shall not be deemed goods within the meaning of the Bankruptcy Acts. For an explanation hereof the reader should refer to the article on the ORDER AND DISPOSITION CLAUSE. The wordroperty includes money, goods, things in action [see CHOSE IN ACTION], land, and every t description of property, whether real or personal, and w ether situate in England or elsewhere ; also obligations, easements, and every description of estate, interest, and profit present or future, vested or contingent, arising out of or incident to property as above defined. But though adjudicated a bank rupt, the debtor has, until the trustee interferes, a good title to all property, other than realty, acquired after the bankruptcy. Until such an interference, all transactions by a bankrupt after his bankruptcy, with any person dealing with him bond fide and for value, in respect of his after-acquired personal property, whether with or without the knowledge of his bankruptcy, are valid against the trustees. The bona fides of the bankrupt is immaterial.
Disqualifications of a bankrupt.—When adjudged bankrupt, a debtor cannot (i.) sit or vote in the House of Lords, or on any committee thereof, or be elected thereto as a peer of Scotland or Ireland ; (ii.) be elected to, or sit or vote in, the House of Commons ; (iii.) be appointed, or act as, a police of the peace ; (iv.) be elected, or hold office as mayor, alderman, or councillor; or (v.) as guardian of the poor, overseer, member of a sanitary authority, school board, highway board, burial board, or select vestry ; or (vi.) as member of a county council. If a person whilst holding the positions iv., v., and vi. is adjudged bankrupt, his office will thereupon become vacant. None of these disqualifications shall exceed a period of five years the date of any discharge which may be granted. They are, moreover, removed, and cease when the adjudication is annulled ; so also where the debtor obtains his discharge with a certificate to the effect that his bankruptcy was caused by misfortune, without any misconduct on his part.
Annulment of adjudication.—Where, in the opinion of the Court, a debtor ought not to have been adjudged bankrupt, or where it is proved to the satis faction of the Court that the debts of the bankrupt are paid in full, the Court may, on the application of any person interested, annul the adjudication. Any debt disputed by a debtor will be considered as paid in full for the purpose of annulment, if the debtor enters into a bond, in such sum and with such sureties as the Court approves, to pay the amount to be recovered in any proceeding for the recovery of or concerning the debt, with costs. If a creditor cannot be found, the debt will be deemed paid in full, if the amount thereof is paid into Court. In the case of an annulment, all dispositions of property and payments of money made as a result of the bankruptcy will be valid ; but unless otherwise ordered, all the property of the debtor shall revert to him for all his estate or interest therein. An annulment will also remove all the disqualifications involved in • the bankruptcy. In annulling an adjudication the Court has regard to the good of the community as well as to the interests of the creditors.
Compositions and schemes of arrangements.—On the adoption hereof by the creditors an adjudication of bankruptcy may be avoided, and the receiving order discharged. It is therefore necessary that special attention should be paid to the provisions of the Bankruptcy Acts on this subject. Compositions and schemes of arrangement may be proposed either before adjudication or after ; but in any case the proposal must come from the debtor. The terms themselves are readily understood by a business man, and do not require special definition. It is sufficient to say that any arrange ment would come within the meaning of the terms whereby less than 20s. in the £ is proposed to be paid by the debtor to all his creditors in full satis faction and discharge of their claims ; or whereby the full amount of such claims or any agreed proportion thereof is with a like object proposed to be paid in sonic time or manner other than forthwith in cash. Should a debtor intend to make such a proposal, it should be submitted within four days from the delivery of his statement of affairs. The proposal must be in writing signed by the debtor, embodying the terms of the composition or scheme which he is desirous of submitting for the consideration of his creditors, and setting out particulars of any sureties or securities proposed. It should lodged with the official receiver within the above-mentioned period. The official receiver will thereupon hold a meeting of creditors before the public examination is concluded, and send each creditor, before the meeting, a copy of the proposal, together with his, the official receiver's, report thereon. The proposal will be considered duly accepted by the creditors, if at the meeting a majority in number, and three-fourths in value, of all the creditors who have proved their debts pass a resolution of acceptance; but it will not be finally binding until it has been approved by the Court. At the meeting the debtor may amend the proposal, if such amendment is, in the opinion of the d'ffiktial receiver, calculated to benefit the general body of the creditors.