Insolvency Act 1986, section 382

“Bankruptcy debt” , “liability”

Part XI Interpretation for Second Group of Parts

(1) “Bankruptcy debt”, in relation to a bankrupt, means (subject to the next subsection) any of the following—

(a)any debt or liability to which he is subject at the commencement of the bankruptcy,

(b)any debt or liability to which he may become subject after the commencement of the bankruptcy (including after his discharge from bankruptcy) by reason of any obligation incurred before the commencement of the bankruptcy,

[F1003 (c)any amount specified in pursuance of section 39(3)(c) of the M29Powers of Criminal Courts Act 1973 in any criminal bankruptcy order made against him before the commencement of the bankruptcy, andF1003]

(d)any interest provable as mentioned in section 322(2) in Chapter IV of Part IX.

(2)In determining for the purposes of any provision in this Group of Parts whether any liability in tort is a bankruptcy debt, the bankrupt is deemed to become subject to that liability by reason of an obligation incurred at the time when the cause of action accrued.

(3)For the purposes of references in this Group of Parts to a debt or liability, it is immaterial whether the debt or liability is present or future, whether it is certain or contingent or whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion; and references in this Group of Parts to owing a debt are to be read accordingly.

(4) In this Group of Parts, except in so far as the context otherwise requires, “liability” means (subject to subsection (3) above) a liability to pay money or money’s worth, including any liability under an enactment, any liability for breach of trust, any liability in contract, tort or bailment and any liability arising out of an obligation to make restitution.

[F1004 (5)Liability under the Child Support Act 1991 to pay child support maintenance to any person is not a debt or liability for the purposes of Part 8.F1004]

Definitions used in section 382 2

any amount

(2) In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020 .

Defined in Sch.6 para.15D(2) · see it in the full Act
bankruptcy debt

(a) in relation to a bankrupt, means a person to whom any of the bankruptcy debts is owed (being, in the case of an amount falling within paragraph (c) of the definition in section 382(1) or “bankruptcy debt”, the person in respect of whom that amount is specified in the criminal bankruptcy order in question), and

Defined in s.383(1) · see it in the full Act

Cases considering section 382 60

Secretary of State for Work and Pensions v Payne and another

[2011] UKSC 60 · 14 December 2011Interprets

A liability to repay overpaid benefit or a Social Fund loan existing when bankruptcy commences falls within the definition of a bankruptcy debt (see paras [17]–[18]; [31]). The provision gives debt and liability a wide meaning, supporting the classification of a statutory repayment liability as a bankruptcy debt (see paras [17]–[18]). A liability includes a liability to pay money under an enactment. Context does not justify excluding a benefit or Social Fund repayment liability merely because recovery by deduction has been chosen (see paras [17]–[19]; [31]; [43]).

Azuonye v Kent

[2019] EWCA Civ 1289 · 19 July 2019Defines

Section 382(1) contributes to the broad definition of bankruptcy debt by including liabilities existing at commencement and liabilities arising later from obligations incurred before commencement. (see para [10]) Section 382(3) confirms that provability is not defeated because a liability is future, contingent, uncertain, unliquidated or otherwise difficult to quantify. (see paras [10]-[12]) Section 382(4) gives liability a wide meaning, including liabilities to pay money or money’s worth and liabilities arising under enactment, contract, tort, bailment, trust or restitution. (see para [10])

Green (Supervisor of the IVA of Wright) v Wright

[2017] EWCA Civ 111 · 1 March 2017Defines

Section 382 supplies the meaning of Debt, modified by substituting commencement of the IVA for commencement of bankruptcy. The definition fixes the relevant creditor class by reference to obligations existing at commencement. (see paras [26]-[27])

40 more judgments, and what each says about section 382, are in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F1002Words in s. 382 heading substituted (8.5.2012) by Welfare Reform Act 2012 (c. 5), ss. 142(2), 150(2)(i)
  2. F1003S. 382(1)(c) repealed (prosp.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, 171, Sch. 8 para. 16, Sch. 16 text repealed prospectively or the amendment may be in effect for limited purposes, see the commentary.
  3. F1004S. 382(5) inserted (8.5.2012) by Welfare Reform Act 2012 (c. 5), ss. 142(1), 150(2)(i)

Modifications

  1. C1117S. 382 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Marginal citations

  1. M291973 c. 62.