Part XXIV

Insolvency

Bankruptcy

Petitions
372
1
The Authority may present a petition to the court—
a
under section 264 of the 1986 Act (or Article 238 of the 1989 Order) for a bankruptcy order to be made against an individual; or
b
under section 5 of the 1985 Act for the sequestration of the estate of an individual.
2
But such a petition may be presented only on the ground that—
a
the individual appears to be unable to pay a regulated activity debt; or
b
the individual appears to have no reasonable prospect of being able to pay a regulated activity debt.
3
An individual appears to be unable to pay a regulated activity debt if he is in default on an obligation to pay a sum due and payable under an agreement.
4
An individual appears to have no reasonable prospect of being able to pay a regulated activity debt if—
a
the Authority has served on him a demand requiring him to establish to the satisfaction of the Authority that there is a reasonable prospect that he will be able to pay a sum payable under an agreement when it falls due;
b
at least three weeks have elapsed since the demand was served; and
c
the demand has been neither complied with nor set aside in accordance with rules.
5
A demand made under subsection (4)(a) is to be treated for the purposes of the 1986 Act (or the 1989 Order) as if it were a statutory demand under section 268 of that Act (or Article 242 of that Order).
6
For the purposes of a petition presented in accordance with subsection (1)(b)—
a
the Authority is to be treated as a qualified creditor; and
b
a ground mentioned in subsection (2) constitutes apparent insolvency.
7
“Individual” means an individual—
a
who is, or has been, an authorised person; or
b
who is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.
8
“Agreement” means an agreement the making or performance of which constitutes or is part of a regulated activity carried on by the individual concerned.
9
“Rules” means—
a
in England and Wales, rules made under section 412 of the 1986 Act;
b
in Scotland, rules made by order by the Treasury, after consultation with the Scottish Ministers, for the purposes of this section; and
c
in Northern Ireland, rules made under Article 359 of the 1989 Order.