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1 May, 2019 | Nathan Tetzlaff
Section 36 of the Insolvency Act 2006 provides that the Court, may, at its discretion, adjudicate a debtor bankrupt if the creditor has established the requirements set out in s 13. These requirements are:
An act of bankruptcy is committed if a creditor has obtained a final judgment or order against the debtor, execution of that judgment or order has not been halted, the debtor has been served with a a bankruptcy notice, and the debtor has not within 10 working days (in the case of a debtor served in New Zealand) either complied with the notice or satisfied the Court that he or she has a cross claim against the creditor.
The Court has a jurisdiction to make an adjudication order if the criteria above have been met. However, they also have discretion to refuse to adjudicate a debtor bankrupt if:
Similarly, the Court can exercise its discretion not to make an adjudication order if the validity of the underlying judgment relied on is questioned. If it is sufficiently clear to the Bankruptcy Court that there is a sound reason to believe that there is a flaw in t
he underlying judgment, the Bankruptcy Court could respond to it by giving time for reassessment of the judgment elsewhere, dismiss the application or to exercise its discretion not to make an adjudication order.