Services / Bankruptcy and rehabilitation
Discharge from bankruptcy: three years or more
For an individual, discharge arrives on its own when the period ends; no application is needed. But the period is not always three years, and what lengthens it is worth knowing at the start of the case rather than near the end.
Two routes to discharge
Section 67/1 of the Bankruptcy Act B.E. 2483 (1940) provides that once judgment of bankruptcy has been given, the bankrupt may be discharged either by a court order under section 71 or on the expiry of the period in section 81/1. The first requires an order; the second happens of its own accord.
Three years is the default
The first paragraph of section 81/1 provides that, subject to section 81/2, an individual adjudged bankrupt is discharged as soon as three years have passed from the day judgment of bankruptcy was given. The starting point is the judgment of bankruptcy, not the absolute receivership order and not the filing of the petition.
The ground that makes it five
Section 81/1(1) provides that where the person has been adjudged bankrupt before, and five years have not yet passed between that earlier judgment and the later receivership order, the period is extended to five years. A second bankruptcy close behind the first therefore bears directly on the timing.
The grounds that make it ten
Sections 81/1(2) and (3) extend the period to ten years for a fraudulent bankrupt not falling within (3), and for a person whose bankruptcy arises from or is connected with an offence in the nature of borrowing that defrauds the public under the law on that subject. For (2) the statute leaves an opening: where there are special reasons and at least five years have passed since the judgment, the court may order discharge before the ten years are up, on the application of the official receiver or of the bankrupt.
Where more than one ground applies
The closing paragraph of section 81/1 provides that where more than one of grounds (1), (2) or (3) applies, the extension runs on whichever single ground carries the longest period. The periods do not accumulate; only the longest applies. That is easily misread when the sub-sections are looked at one at a time.
PREPARE
What to bring
- The judgment of bankruptcy, with its date
- The absolute receivership order and the date it was published
- Any earlier bankruptcy judgment against you
- Material in the file bearing on the cause of the bankruptcy
- The statement of assets and liabilities filed with the official receiver
QUESTIONS
Questions this raises
Do I have to apply to be discharged?
Section 81/1 says the person is discharged as soon as the period expires, which is a discharge by operation of law, unlike the route under section 71 which requires a court order. What is worth doing is establishing the date of the bankruptcy judgment precisely, and checking whether any of the extending grounds applies.
Three years from the receivership order or from the judgment?
The first paragraph of section 81/1 says from the day the court gave judgment of bankruptcy, which is a different date from the absolute receivership order. In practice the two can be some way apart, so the judgment itself should be looked at rather than remembering the first order received.
LAW
The legislation
- Bankruptcy Act B.E. 2483 (1940), sections 67/1 and 81/1
ENQUIRIES
