Bankruptcy is the state of an individual or institution failing or not being able to pay debts and conduct business activities. In order to ensure that individuals or institutions do not reach a state of bankruptcy, the law has established various systems to take measures to modify business operations procedures to reduce the impact if an individual or institution reaches a state of ceasing its activities.

Bankruptcy is a legal procedure that enables a person or a company that is bankrupt to settle with its debtors for its assets to be placed under the management of the liquidator who will sell them and pay all or part of the debts if the available amount is insufficient. 

The agency provides personal bankruptcy and corporate bankruptcy services. Bankruptcy procedures are described in the Bankruptcy Law Chapter 25 of the Laws of Mainland Tanzania and the Companies Law Chapter 212 along with its regulations. The High Court has sole jurisdiction to hear bankruptcy proceedings. The Office of the Administrator General oversees the company's Bankruptcy issues after being appointed by the courts subject to the affairs of the company before it reaches the stage of bankruptcy. In accordance with the Bankruptcy Law Chapter 25, the Administrator General is the Official Receiver and performs the following duties in relation to the proceedings of the debtor:

a)    Investigating the conduct of the debtor and informing the court, explaining if there is reason to believe that the debtor has committed any act that is an offense under this Law, or any law repealed by this Law, or which may justify the court to refuse, suspend or qualify the order of his removal;

b)    Provide other information related to the conduct of the debtor in accordance with the court's instructions;

c)     Participate in the investigation of the debtor as he deems appropriate;

d)    To participate in and assist in the prosecution of any fraudulent debt as the Attorney General may direct.

Also, in relation to the assets of the debtor, the official receiver, along with other duties, has the following duties: -

a)    Be a interim receiver of the debtor's assets where a special manager is appointed pending the appointment of a trustee;

b)    To direct the special manager to find various sources of funds, including borrowing for the interests of creditors or as appropriate;

c)     Convening and leading the first meeting of creditors;

d)    Providing representative forms at creditors' meetings;

e)    Notifying creditors of any proposal that the debtor may have made regarding the liquidation of his assets;

f)      Announcing the receivership order, the date of the first meeting of creditors, and the open investigation of the debtor, and other things that will be required to be announced;

g)    Become a trustee whenever the position is open in the trustee's office

Debtors petition

• A debtor files a Statement of Affairs with Official Receiver prior filing petition in court.
• Official Receiver issues certificate and files it with the court.
• Courts make a Receiving Order and the Official Receiver is appointed Receiver.
• The Official Receiver proceeds under the Bankruptcy Act, Cap 25 R.E 2002 and Bankruptcy Rules to liquidate the debtors Estate.

Creditors Petition

• Creditors petition the court to have the Receiving Order made in respect of the debtors estate.
• Official Receiver issues certificate and files it with the court.
• Courts make a Receiving Order and the Official Receiver is appointed Receiver.
• The Official Receiver proceeds under the Bankruptcy Act, Cap 25 R.E 2002 and Bankruptcy Rules to liquidate the debtors Estate.