ABSTRACT

This chapter explains the effect on a creditor’s rights when a debtor becomes bankrupt or goes into liquidation; it will be seen that the individual right of the unsecured creditor to pursue the debtor will generally come to an end and will be replaced by a right to prove in the insolvency in accordance with the rules for quantification and setoff provided by the insolvency legislation. There are likely to be some pre-insolvency methods of enforcement in progress at the onset of the bankruptcy or liquidation; the consequences of the advent of the insolvency for these are explained. The rights of some potential creditors of the insolvent will be accelerated by the insolvency so that future and contingent claims can also be dealt with in the insolvency.