7 Debts, Credits, and Dealings

7.01 The insolvency set-off section applies when there are mutual credits, mutual debts or other mutual dealings. It was not always in this form. The original set-off section in 17051 referred only to mutual credit, and in 1732 it was expressed in terms of mutual credit and mutual debts.2 It was not until 1869 that ‘mutual dealings’ was added.3 7.02 The courts interpreted ‘mutual debts’ as referring to debts that were both in existence and presently payable before the bankruptcy.4 It is apparent that ‘mutual credits’ would include mutual debts, in the sense that,...