Question 3.

Describe the duties of a bankrupt and the restrictions a bankrupt is subjected to

during bankruptcy.
1. Duties of a Bankrupt During Bankruptcy.
A bankrupt shall to the best of his ability, assist in the realization of his property and
distribution of the proceeds among the creditors. This is a general duty of the bankrupt,
and it includes any other duty imposed on him by the Insolvency Act or by any other
written law. ( sec.140)
Once the property has been acquired, the bankrupt has a duty to disclose to the trustee of
any property acquired before discharge, that could be divisible among the creditors.
v Non compliance without a reasonable excuse, calls for an offense
committed and is liable to a fine of not more than two hundred thousand
shillings, not exceeding 6 months imprisonment, or both. (Sec 141)
The bankrupt has a duty to deliver the property to the bankruptcy trustee on demand. The
property that will be called for is one that is divisible among the creditors and is under the
bankrupts control.
Any property that has been acquired by the bankrupt before the discharge, the bankrupt is
also required to deliver it to the trustee on demand.
Furthermore, the bankrupt is required to take all the steps necessary in relation to his
property and the distribution of the proceeds to the creditors. These steps are ones that are
required by;
The bankruptcy trustee.
Prescribed by the insolvency regulations.
Directives taken by the courts via a court order in reference to the bankruptcy, or,
by an application made by the bankruptcy trustee or creditor to the court, or,
Requirement of execution of the power of attorney, transfers and other
documents.
v Non compliance without reasonable excuse, is guilty of contempt of court
and shall be punished accordingly. ( sec. 142)
Where property that is occupied by the bankrupt, by his spouse or former spouse can't be
realized by the trustee for any reason, the trustee may apply to the court for an order
imposing a charge on the said property for the benefit of the bankrupts estate. (Sec 143).
As soon as the bankrupt has been declared bankrupt, shall deliver all the accounting
records and any other documents to the trustee. He also has to notify the trustee about any
other documents that are in his possession or anyone else's possession. (Sec. 144).

The bankrupt has a duty to give the trustee all important information related to the
property ( an accurate list) and the updated lists of all his debtors and creditors. When
required, the bankrupt shall attend to the trustee and verify any statement by statutory
declaration. (Sec. 145).
The bankrupt shall also provide the trustee with details of his income and expenditure
since the Bankruptcy commenced.
v Non compliance calls for a fine of not more than 200,000 shillings, 12
months imprisonment or both. (Sec. 146).
A bankrupt is required to notify the trustee of any change in the name, address,
employment or income within 7 days of the change.
v Non compliance calls for a fine of no more than Ksh.200,000, 6 Months
Imprisonment or both. ( sec 147).
The bankrupt gives the trustee all financial information,
prepares a financial statement showing the financial position of the estate.
Details of bankrupts trading and stocktaking.
Details of the bankrupts profit and loss during any period within 3 years
preceding the date on which the bankruptcy started.
So as to enable the Bankrupt to provide a financial statement, the trustee shall give full
access to the accounting records that are in his possession and if necessary shall provide
the bankrupt with a certified accounts tat the expense of the bankrupts estate. (Sec. 148)
v Non compliance gives rise to a fine of 200,000 shillings, 6 months jail or
both.
2. Restrictions of a Bankrupt during Bankruptcy.
The bankrupt can be required to contribute to the payment of debts by the trustee.
The trustee shall make reasonable allowance for the maintenance of the bankrupt,
relatives and his dependents.
v Non compliance, forces the trustee to make an application to the court to
order the bankrupt to pay the amount required by the trustee.
v The onus of proof is required if the bankrupt defaults in payment. He must
prove it was not deliberate. (Sec 150-151).
An undischarged bankrupt is not allowed to enter into or control any business, be
employed by his relative or employed by a company e.t.c, without the consent of the
trustee or the court. (Sec.152)

v Non compliance calls for a fine of 500,000 shillings, 2years jail term or both.
The bankrupts property may be searched and seized, that is believed to be concealed by
the bankrupt by a court order. (Sec.153)
The trustee may require the bankrupt to vacate any land or buildings that is part of the
bankrupts estate.
v Non compliance to it, the trustee may apply to the court for an order of possession
of the land/ building, if the court believes the bankrupt has no justification to
remain there. (Sec.155)
The bankrupt has the right to take and inspect copies of accounting records, statements,
proof of debts and minutes of creditors meetings. (Sec. 156)
Bankrupt is restricted to recover the bankrupts property or deal with it in any manner.
(Sec. 157).
The bankrupt is prohibited from taking steps to defeat beneficial interests or destroy any
estate in any property that is entitled to him before and after the discharge. (Sec.158)
.