Last year in October, Masereka was officially declared bankrupt by the court. Unfortunately early this year, his mother passed away leaving him some land in Kiira and her poultry business. His cousin John told him that because he was declared bankrupt and given someone to look after his property, he would not be given his newly acquired assets. Masereka wants to know if he will be granted access to the property that his mother left him.
WHAT DOES THE LAW SAY?
Yes, the person that has been declared bankrupt (unable to pay their debts), can still acquire property. This can be by buying it or if someone gives it to them to as a gift, inheritance, etc. However, since that person is bankrupt, the management and handling of their property is in the hands of someone else called a trustee. This means that this trustee is entitled to even the new property that the bankrupt person has received. For example, if Masereka is given a piece of land, or his income increases while he is bankrupt, the trustee of his property is entitled to claim for this property or the increased income so it can be used to settle Masereka’s debts.
If this happens (either increase of income or the getting of new property), the law requires the bankrupt person (Masereka) inform his trustee that there has been an increase in his income or that he has acquired new property.
On the other hand, even the trustee can write to court and claim for the new property or income of the bankrupt person if they become aware of it.
If the bankrupt person does not inform the trustee this, then it is an offence and he can even be imprisoned for up to 2 years or a fine of UGX 400,000.
📷:Unsplash
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