572. Proof of debts
In exercising his or her power of admission or rejection of proofs subject to revision by the Court, the receiver shall have regard to the provisions following—
Proof by secured Creditors
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(1) If a secured creditor realises his or her security, he or she may prove for the balance due to him or her after deducting the net amount realised.
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(2) If a secured creditor surrenders his or her security to the receiver or trustee for the general benefit of the creditors, he or she may prove for his or her whole debt.
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(3) If a secured creditor does not either realise or surrender his or her security, he or she shall, before ranking for dividend, state in his or her proof the particulars of his or her security, the date when it was given, and the value at which he or she assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him or her after deducting the value so assessed.
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(4) (a) Where a security is so valued the trustee may at any time redeem it on payment to the creditor of the assessed value.
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(b) If the trustee is dissatisfied with the value at which a security is assessed, he or she may require that the property comprised in any security so valued be offered for sale at such times and on such terms and conditions as may be agreed on between the creditor and the trustee, or as, in default of such agreement, the Court may direct. If the sale be by public auction the creditor or the trustee on behalf of the estate may bid or purchase.
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(c) Provided that the creditor may at any time by notice in writing, require the trustee to elect whether he or she will not exercise his or her power of redeeming the security or requiring it to be realised, and if the trustee does not, within 6 months after receiving the notice, signify in writing to the creditor his or her election to exercise the power, he or she shall not be entitled to exercise it: and all rights and interests in the property comprised in the security vested in the trustee shall in the creditor, and the amount of his or her debt shall be reduced by the amount at which the security has been valued.
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(d) Where a security is so realised, the net amount realised shall be substituted for the amount of any valuation previously made by the creditor, and shall be treated in all respects as an amendment made by him or her under his or her general power of amending the valuation of his or her security.
Interest
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(5) On any debt or sum certain, payable at a certain time or otherwise, wherein interest is not reserved or agreed for, and which is overdue at the date of the receiving order and provable in bankruptcy, the creditor may prove for interest at the legal rate to the date of the order from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made giving the debtor notice that interest will be claimed from the date of the demand until the time of payment.
Rights of Mortgage and Privileged Creditors upon the Real Estate
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(6) When the distribution of the proceeds of the real estate shall be made previously to that of the proceeds of the personal estate, or simultaneously therewith, the mortgage and privileged creditors whose demands are not satisfied out of the proceeds of the real estate, shall rank for what remains due to them rateably with the simple contract or chirographic creditors, on the assets belonging to the general body: Provided always that their claims shall have been duly proved and admitted.
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(7) If one or several distributions of the proceeds of the personalty precede the distribution of the proceeds of the real estate, the privileged or mortgage creditors whose claims are duly proved and admitted, shall participate in the dividends in proportion to their proofs; subject, however, should the case happen, to the deductions hereafter mentioned.
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(8) After the sale of the real property and the settlement in order of the various mortgage and privileged creditors, those among them who are entitled to a preference for the whole amount of their demands on the real estate shall receive the same according to their classification subject to a deduction of the sums which they may have already received from the simple contract fund. The sums thus deducted shall not remain in the privileged fund, but return to, and for the benefit of, the simple contract or general fund.
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(9) With respect to the mortgage creditors who have received only a partial payment out of the proceeds of the real estate, the following rule shall be adopted:
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Their rights in the simple contract fund shall be finally determined by the amount for which they shall remain creditors, after the adjustment of their respective quotas in the real estate; and the money which they shall have previously received beyond this proportion shall be retained out of their quota from the real estate, and shall return to the simple contract fund.
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(10) The mortgage creditors whose claims are not satisfied out of the proceeds of the real estate, on account of the fund being absorbed by creditors, previously registered in order of rank, shall be considered as simple contract creditors and subject, as such, to the effects of the composition, and to all the other operations relating to the simple contract body of creditors.
Rights of Married Women
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(11) The presumption is that the property acquired after marriage by the wife of a bankrupt belongs to her husband, with the exception of linen and wearing apparel, and has been purchased with his money, and should form part of the assets, saving the right of the wife to prove the contrary.
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(12) Where there is no community, all property, whether real or personal, belonging to the wife under her marriage contract or devolving upon her by inheritance, donation, or bequest, or purchased by her with her own money, belongs exclusively to the wife.
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(13) Where the husband is a trader at the time of the marriage or becomes a trader within one year afterwards, the legal hypothec of the wife extends only to—
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(a) monies and movables which are her marriage portion, or the acquisition of which, since the marriage, she can prove by any document bearing a date certain;
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(b) the recovery of her property alienated during her marriage;
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(c) the payment of debts contracted by her on behalf of her husband.
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(14) The wife has no claim against the estate in respect of any benefits contained in the marriage contract, nor can the creditors avail themselves of any concession therein made by the wife in favour of her husband.