Analysis Of Right Of Set-off In Bankruptcy Law

The set-off rights in Bankruptcy Law originate from those in Civil Law, thus possess some characteristics of the set-off rights in civil law. The insolvency set-off rights are of great significance to maintaining the benefit of creditors, implying the fairness value. However, the so-called "fairness" in the insolvency set-off rights greatly impacts the basic concept of the Bankruptcy Law, reflecting the conflicts between the insolvency set-off rights of individual creditors and equal claim rights of majority creditors. The insolvency set-off rights provision in Article 40 of the new Bankruptcy Law made some progress in (?) stipulating the exceptions and limitations of the set-off right, in comparison with the trial version of the "Bankruptcy Law (Trial)". However, because of the complication of life reality, it is impossible for this provision to exhaust all situations not suitable for set-off. In addition, the new Bankruptcy Law on the provision of set-off rights is too dogmatic therefore lack of operability.In this essay, by using real life examples that lead to the topics of insolvency set-off system, based on balancing the interests of various parties involving the insolvency set-off rights and thorough analyzing the differences between the insolvency set-off rights in the Bankruptcy Law and those in the Civil Law, we researched on the conflict of interests resulted from the unbalanced insolvency set-off rights of different parties. Moreover, we focus on the analysis of the implementation and limitation of the insolvency set-off rights, in hoping the correct application of the law, simplification of the bankruptcy procedure and improvement of its efficiency so as to protect the interest of all creditors.