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In Hong Kong, Bankruptcy & Debt Law regulates financial distress situations, where an individual or company cannot repay their debts. Bankruptcy pertains to individuals, while winding up proceedings apply to companies. Bankruptcies are covered under the Bankruptcy Ordinance (Cap 6), while companies are governed by the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32). Hong Kong places a high priority on creditor rights, and laws here lean in favor of the creditor. However, the debtor also has certain rights that need to be respected.
The complexity of bankruptcy and debt law can be overwhelming to navigate. You might need a lawyer if you are a debtor struggling to pay your debts, want to declare bankruptcy, or need assistance in negotiating new payment terms with creditors. Alternatively, if you are a creditor trying to recoup debts from bankrupt debtors, legal aid can be beneficial in handling the litigation process.
Key aspects of the local laws related to bankruptcy and debt in Hong Kong include a provision that permits creditors to petition for a bankruptcy order if a debtor owes them HKD 10,000 or more. Creditors can also initiate winding-up proceedings against companies if the company owes them HKD 10,000 or more. For debtors, there is a Debt Relief Plan which applies to individuals whose assets and income do not exceed certain thresholds. Bankruptcy in Hong Kong generally lasts for 4 years, but can be extended if the debtor fails to cooperate or there are other complicating factors.
Following bankruptcy, the debtor's assets are turned over to a trustee, who sells them to repay creditors. The bankrupt individual is also subject to certain restrictions, for example, they cannot directly or indirectly manage a business without the court's permission.
Bankruptcy applies to individuals, while winding-up pertains to companies. Both processes involve realising the debtor's assets to repay creditors, but the procedural and legal aspects differ.
Yes, a bankrupt individual can still work, but their income may be subject to a contribution order, requiring them to repay some of their earnings to their creditors.
Yes, bankruptcy can be annulled under certain circumstances, such as if the debts and bankruptcy expenses are paid in full, or if it is shown that the bankruptcy order should not have been granted in the first place.
Not all debts. Certain debts such as court penalties, student loans, and maintenance payments ordered by the court are not discharged by bankruptcy.
The Official Receiver’s Office (ORO) is a government body dealing with bankruptcy administration. The Legal Aid Department may offer free legal advice or assistance for those with financial need. Various non-profit credit counselling services also provide support for individuals facing debt problems in Hong Kong.
If you require legal assistance with bankruptcy and debt, it's recommended to seek advice from a law firm specializing in such cases. A lawyer can guide you through the process, explain your legal rights, and help manage negotiations with creditors. Remember to provide all relevant financial information for their assessment.
