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Amwelladmin (talk | contribs) (Created page with "It has been treated as an authoritative statement of the law since 1972<ref>See {{Casenote|National Westminster Bank Ltd|Halesowen}} and in 1995, {{casenote|Stein|Blake}}</ref...") |
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It has been treated as an authoritative statement of | It has been treated as an authoritative statement of English law since 1972<ref>See {{Casenote|National Westminster Bank Ltd|Halesowen}} and in 1995, {{casenote|Stein|Blake}}</ref> that '''you cannot contract out of [[insolvency set-off]]'''. The [[insolvency set-off]] rules operate automatically and are mandatory upon the commencement of winding-up. | ||
The administrator must take account of all dealings between the creditor and the bankrupt (including future and contingent obligations and unliquidated sums owing). Sums due from one must be set off against the sums due from the other, except that sums due from the bankrupt cannot be included if, when the bankrupt debtor incurred them, the creditor knew of existing formal bankruptcy steps against that debtor: | |||
*a resolution or petition to wind-up (if a company); | |||
*an application for an administration order or of notice of intention to appoint an administrator (if a company); or | |||
*a pending bankruptcy petition (if a natural person). | |||
Therefore a bank cannot agree ''not'' to exercise the right to [[Combination of accounts|combine accounts]].<ref>Interestingly, this is not the case under the Swiss Bankruptcy Code.</ref> |