Cap. 13 Art. 477State of bankruptcy. Cap. 12. Cap. 632.

(1) Every trader who, having regard also to his contingent and prospective liabilities, is unable to pay his commercial debts, shall suspend the payment of all his debts, and shall, upon the suspension thereof, be in a state of bankruptcy.

(2) Without prejudice to the provisions of sub-article (1), if a commercial debt due by the trader has remained unsatisfied in whole or in part after twenty-four (24) weeks from the enforcement of an executive title against the trader by any of the executive acts specified in article 273 of the Code of Organization and Civil

Procedure, the trader shall suspend the payment of all his debts and be deemed to be in a state of bankruptcy.

(3) For the purposes of this Part, the term "trader" shall, in addition to the persons referred to in article 4, also include any other natural or legal person, in respect of commercial debts for which such person is, or becomes, liable, whether as principal debtor or otherwise.

(4) In this Part, unless the context otherwise requires, the following expressions have the meaning hereby assigned to them:

(a) "commercial debt" means any liability incurred by any person, whether as principal debtor or otherwise, insofar as that liability was incurred, or otherwise arises as a result of any liability which was originally incurred in the course of, in connection with, or for the purposes of, the exercise of any trade, business, craft or profession by the original debtor, and any other liabilities as the Minister responsible for the Malta Business Registry may, by regulations prescribe;

(b) "personal debt" means any liability incurred by any person, whether as principal debtor or otherwise, which is not a commercial debt;

(c) "debt", when used alone, means any liability incurred by any person, whether as principal debtor or otherwise, and whether a commercial debt or a personal debt; and

(d) "competent authority" means the same as the definition assigned to it in the Insolvency Practitioners Act.

(5) A debt falling under sub-article (4)(a), which is not exclusively incurred in the pursuit of the activities described in sub-article (4)(a), shall, for the purposes of this Part, be treated as a commercial debt to the extent of that part of the debt which has been incurred, or which has arisen as a result of the activities provided for in sub-article (4)(a), and the term "commercial debt" shall, for the purposes of this Part, be read and construed accordingly.

(6) Any transfer of assets, payment of debts, or act of trade made by a trader who is in a state of bankruptcy, and which are made between the date of the suspension of payments and the date of the judgment declaring bankruptcy, shall, unless a determination is made by the court in accordance with article 482(3) that the debtor is not in a state of bankruptcy, be null and void.