On Expansion And Restriction Of The Right Of Setoff In Bankruptcy Law

The right of setoff in Bankruptcy Law (referred to as bankruptcy setoff) means theright to advocate setoff to the administrator before final allocation of bankruptcy propertyis determined, in the event that the creditor owns debts to the debtor, that is, the bankruptcy,before the acceptance of bankruptcy petition, regardless of pay off deadline and subjects.In2007, the provisions on bankruptcy setoff are improves upon by <Bankruptcy Law ofthe People’s Republic of China>, but there obviously exists inadequacies. It indicates thatthe legal provisions on bankruptcy setoff in current Bankruptcy Law don’t adapt to thejudicial practice and social situation of current China. Therefore, it becomes an importanttask of bankruptcy laws of China to build a complete bankruptcy setoff system as soon aspossible.The text of this paper is divided into three parts, which focuses on the expansionaryand restrictive provisions on bankruptcy setoff in Bankruptcy Law of China. Besides, itcontains some suggestions for improvement under the circumstance of currant China.Described as follows：Part one, the basic theory of expansion and restriction of bankruptcy setoff. First, theconcept and nature of bankruptcy setoff are defined. Then, the controversial issues of thebankruptcy setoff are shown. Finally, the basis of expansion and restriction of bankruptcysetoff is analyzed.Part two, the contents of expansion and restriction of bankruptcy setoff. In this part,the general case and special circumstances of expansion and restriction of bankruptcysetoff are discussed, focusing on the contents of restriction of bankruptcy setoff. Inaddition, referring to the provisions of Bankruptcy Law, the contents of this part show theinadequacies of bankruptcy setoff existing when realize its value in China.Part three, suggestion for improvement on expansion and restriction of bankruptcysetoff in China. In this section, first, the writer analyzes the status quo of expansion and restriction of bankruptcy setoff. Followed, considering the current situation of China, somesuggestions are made to improve the system of bankruptcy setoff in China after reviewingthe laws about expansion and restriction of bankruptcy setoff in other countries of theworld.