“204 Insolvent gift within 2 years may be cancelled

• A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if the bankrupt made the gift within 2 years immediately before adjudication.

“205 Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts

• “(1) A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if—

  • “(a) the bankrupt made the gift within the period beginning 2 years immediately before adjudication and ending 5 years immediately before adjudication; and

  • “(b) the bankrupt was unable to pay his or her debts.

  “(2) A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)(b) unless the party claiming under the gift proves that the bankrupt was immediately after the making of the gift, or at any time after that up to his or her adjudication, able to pay his or her debts without the aid of the property that the gift is composed of.”

• “(b) a reasonable person in A's position would not have suspected, and A did not have reasonable grounds for suspecting, that,—

  • “(i) in the case of an insolvent gift, the bankrupt was, or would become, unable to pay his or her debts without the aid of the property that the gift is composed of; or

  • “(ii) in the case of any other irregular transaction referred to in section 206(1), the bankrupt was, or would become, unable to pay his or her due debts; and”.

• “(2) However, a debtor is not automatically discharged if the Assignee—

  • “(a) is satisfied that the 12-month period should be extended for the purpose of properly considering whether the debtor's participation in the no asset procedure should be terminated; and

  • “(b) sends a written deferral notice to the debtor's last known address before the expiry of the 12-month period.

• “(3) The deferral notice must state an alternative date for automatic discharge, which must be no later than 25 working days after the expiry of the 12-month period.

• “(4) The deferral notice is effective whether or not the debtor receives it.

• “(5) The Assignee must, as soon as practicable, send a written notice of the deferral to each creditor of the debtor known to the Assignee.

• “(6) The debtor is automatically discharged from the no asset procedure on the date stated in the deferral notice.

• “(7) The Assignee may revoke a deferral notice in the same way in which it was sent, in which case, the debtor is automatically discharged from the no asset procedure on—

  • “(a) the expiry of the 12-month period in subsection (1), if the notice is revoked before that date; or

  • “(b) in other cases, the date of revocation.”

“377A Effect of discharge

• “(1) On discharge under section 377, the debtor's debts that became unenforceable on the debtor's entry to the no asset procedure are cancelled, and the debtor is not liable to pay any part of the debts, including any penalties and interest that may have accrued.

  “(2) However, subsection (1) does not apply to—

  • “(a) any debt or liability incurred by fraud or fraudulent breach of trust to which the debtor was a party:

  • “(b) any debt or liability for which the debtor has obtained forbearance through fraud to which the debtor was a party.

  “(3) The debts and liabilities referred to in subsection (2) become again enforceable on discharge under section 377, and the debtor is liable to pay any penalties and interest that may have accrued.”

“377B Discharge does not release partners and others

• A discharge under section 377 does not release any person who, at the date of discharge, was—

  • “(a) a business partner of the discharged debtor; or

  • “(b) a co-trustee with the discharged debtor; or

  • “(c) jointly bound or had made any contract with the discharged debtor; or

  • “(d) a guarantor or in the nature of a guarantor of the discharged debtor.”

• “(ha) if P is discharged from the no asset procedure under section 377, the date when P was so discharged:”.

• “(4A) All information relating to a person who has been admitted to the no asset procedure must be removed from the public register maintained under section 368—

  • “(a) 4 years after the date of discharge under section 377; or

  • “(b) as soon as practicable after a termination under section 372(a), (c), or (d).”

“449A Information kept indefinitely on public register after multiple insolvency events

• “(1) This section applies in the case of a person who—

  • “(a) is or has been bankrupt on 2 or more occasions; or

  • “(b) is or has been both bankrupt and discharged from the no asset procedure under section 377.

  “(2) Information about the person must not be removed from the public register under this Act and, in particular, section 449(4), (4A), and (5) do not apply to the person.

  “(3) The Assignee must ensure that the public register contains all of the information required by this Act about the person and each insolvency event.

  “(4) Bankruptcies under the Insolvency Act 1967 count for the purposes of subsections (1) and (3), but bankruptcies under the Bankruptcy Act 1908 do not count for either purpose.”

• “(da) is discharged from the no asset procedure under section 377; or”.

• “(h) is subject to section 449A (which relates to permanent retention of information on the register after multiple insolvency events).”

• “(e) by any person for the purpose of ascertaining whether section 449A applies to another person.”