Court hearing

• Costs and fees
• Concurrent proceedings
• Recall

All creditor petitions proceed through the sheriff court, not the AiB. Lay representation is available.1Ch4 AoS(SCB) Rules

At the hearing, the client has the chance to state why sequestration should not be awarded.

There are a couple of defences that may work for your client.

•If a statutory moratorium has been applied for before the petition was presented to court, they could argue that it should not be awarded as they are protected by the moratorium.2s197(3)(c) B(S)A 2016
•If the client already has a DPP approved and it is for the same debt, the petition is invalid.3s4(3) DAA(S) 2002

If the client has applied for a DPP, but it has not yet been awarded, or if the client intends to apply, they can ask that the petition be continued for up to 42 days or longer to allow you the time to make an application to the DAS and have a DPP awarded.4s23(3) B(S)A 2016 This is at the sheriff’s discretion, but most sheriffs allow time to make an application for a DPP.

If the DPP is revoked or refused, the creditor can restart proceedings.

If sequestration is awarded, the sheriff appoints an interim trustee/trustee whose duty is to safeguard the estate for the creditors. This may be the AiB, or the creditor may appoint their own trustee who is appointed by the court and agrees to be the trustee.

The interim trustee may call a meeting of creditors and, in most cases, they are appointed as the permanent trustee. Where the AiB is interim trustee, there is not normally a statutory meeting of creditors.

 

1     Ch4 AoS(SCB) Rules »

2     s197(3)(c) B(S)A 2016 »

3     s4(3) DAA(S) 2002 »

4     s23(3) B(S)A 2016 »

Costs and fees

All costs associated with a creditor’s petition (including AiB fees) are paid by the creditor and claimed for in the client’s bankruptcy.

There are no costs involved with appearing in court to defend the granting of a petition (apart from solicitor’s costs if the client decides to employ one).

Concurrent proceedings

Where a petition has been presented to the court, the client cannot apply for their own bankruptcy or a protected trust deed.1ss17 and 18 B(S)A 2016

 

1     ss17 and 18 B(S)A 2016 »

Recall

Recall of a creditor’s petition can be made to the AiB where the client is able to pay their debts in full, and to the sheriff court where the client was not apparently insolvent. You should seek further guidance on this.1s29 B(S)A 2016

 

1     s29 B(S)A 2016 »