Bankruptcy Act 1924

Legislation au C1924A00037 Not in force Act

Legislation content

BANKRUPTCY.

 

No. 37 of 1924.

An Act relating to Bankruptcy.

[Assented to 8th October, 1924.]

BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Part I.—Preliminary.

Short title.

1. This Act may be cited as the Bankruptcy Act 1924.

Commencement.

2. This Act shall commence on a day to be fixed by proclamation.

Parts.

3. This Act is divided into Parts as follows:—

Part I.—Preliminary (Sections 1–8).

Part II.—Administration (Sections 9–17).

Part III.—Constitution, Procedure and Powers of Courts.

Division 1.—Jurisdiction (Sections 18–26).

Division 2.—Procedure (Sections 27–43).

Division 3.—Evidence (Sections 44–51).

Part IV.—Proceedings in connexion with Sequestration.

Division 1.—Acts of Bankruptcy (Sections 52, 53).

Division 2.—Petition and Sequestration Order (Sections 54–65).

Division 3.—Proceedings consequent on Sequestration Order (Sections 66, 67).

Division 4.—Public Examination of Bankrupt (Sections 68–70).

Division 5.—Composition or Scheme of Arrangement (Sections 71–73).

Division 6.—Committee of Inspection (Sections 74, 75).

Part V.—Control over Person and Property of Debtor (Sections 76–80).


Part VI.—Administration of Property.

Division 1.—Proof of Debts (Sections 81–83).

Division 2.—Priority of Debts (Sections 84–89).

Division 3.—Property available for Payment of Debts (Sections 90, 91).

Division 4.—Effect of Bankruptcy on antecedent transactions (Sections 92–98).

Division 5.—Realization of Property (Sections 99–111).

Division 6.—Distribution of Property (Sections 112–118).

Part VII.—Discharge of Bankrupt (Sections 119–125).

Part VIII.—Trustees.

Division 1.—Appointment and Official Name (Sections 126–132).

Division 2.—Remuneration and Costs (Sections 133–136).

Division 3.—Trustees’ Accounts and Audits (Sections 137–146).

Division 4.—Control over Trustees (Sections 147–149).

Division 5.—Vacation of Office of Trustee (Sections 150–153).

Part IX.—Small Bankruptcies (Section 154).

Part X.—Estates of Persons Dying Insolvent (Sections 155, 156).

Part XI.—Compositions and Assignments without Sequestration (Sections 157–188).

Part XII.—Deeds of Arrangement (Sections 189–207).

Part XIII.—Unclaimed Funds or Dividends (Section 208).

Part XIV.—Offences (Sections 209–222).

Part XV.—Miscellaneous (Section 223).

Interpretation of terms.

Cf. E.B.A., s. 167.

4. In this Act, unless the contrary intention appears—

“Affidavit” includes statutory declaration and affirmation;

“Available act of bankruptcy” means any act of bankruptcy available for a bankruptcy petition at the date of the presentation of the bankruptcy petition on which the sequestration order is made;

“Bankrupt” means any person in respect of whose estate a sequestration order has been made;

“Bankruptcy”, in relation to jurisdiction or proceedings, includes any jurisdiction or proceedings under or by virtue of this Act;

“Debt provable in bankruptcy”, or “Provable debt”, includes any debt or liability by this Act made provable in bankruptcy;


E.B.A., s. 1 (2).

“Debtor” includes any person, whether a…

Overview

The Bankruptcy Act 1924 was enacted to address the need for a uniform and streamlined process for dealing with bankruptcy and insolvency within Australia. Prior to its enactment, insolvency laws were primarily governed by the individual states, leading to inconsistencies and inefficiencies in the administration of bankruptcies across the country. This Act was passed by the Parliament of Australia to provide a cohesive legislative framework governing bankruptcy across the Commonwealth, thereby addressing the gap in a unified national approach to insolvency matters. The policy objective of the Act is to ensure a fair and equitable process for the administration of insolvent estates, the protection of creditors' interests, and the eventual rehabilitation of the debtor, where possible. The Act lays out provisions for the administration, jurisdiction, procedures, evidence, and various aspects of bankruptcy, including the roles and responsibilities of trustees, the process for discharging bankrupts, and the protection of certain assets and interests from seizure during bankruptcy proceedings.

Scope and Application

The Bankruptcy Act 1924 applies to all debtors, including married women, foreigners, and persons having the privilege of Parliament, but it does not apply to corporations, partnerships, associations, or companies registered under any Commonwealth or State Act that provides for their winding up. The provisions of the Act relating to remedies against the debtor's property, priorities of debts, effects of composition or arrangement, and the effect of an order for discharge, are binding on the Crown, except where a prior Act, State Act, or law has already created a charge on the Crown's behalf. The Act applies throughout the Commonwealth of Australia and may be extended to any Territory by proclamation of the Governor-General. It does not affect any State Bankruptcy or Insolvency Act provisions not expressly or by necessary implication dealt with in the Act, nor any proceedings pending under a State Act at the Act's commencement. Formal defects in proceedings under the Act do not invalidate them unless substantial injustice results. The Act also extends to cover limited partnerships in the same manner as ordinary partnerships. The Act's provisions can be modified through subordinate instruments such as rules and regulations made under the Act.

Key Provisions

  • The Bankruptcy Act 1924 outlines the framework for handling bankruptcy cases in Australia. It includes definitions, procedural requirements, and the powers and responsibilities of various parties involved in bankruptcy proceedings. Key sections include those that define acts of bankruptcy, which trigger the process, such as making a fraudulent conveyance of property or failing to pay a debt after a creditor's notice. The Act requires creditors to meet certain thresholds to petition for bankruptcy, including having a debt of at least £50 and the debtor committing a recent act of bankruptcy. Upon sequestration, the debtor's property vests in the official receiver or trustee, who must then investigate the debtor's conduct and assets, and hold a public examination of the debtor.
  • The Act imposes several obligations on the parties involved. Debtors must cooperate with the investigation into their affairs, disclose all property, and surrender any books and documents relating to their estate. Trustees and official receivers have duties to investigate the debtor, manage the estate, and distribute dividends to creditors. Creditors must vote on key issues, such as the appointment of a trustee, and provide proofs of their debts. The Act also mandates that certain types of property are exempt from seizure, and establishes priorities for payment of debts, such as wages and funeral expenses.
  • Violations of the Act carry potential criminal and civil penalties. For example, wilful concealment of property or fraudulent conveyances can lead to imprisonment for up to three years. Debtors failing to disclose all property or deliver documents to the trustee may also face imprisonment for up to one year. Trustees who act improperly, such as paying dividends to certain creditors before others, can be fined up to £50. The Act also allows the Court to annul deeds of arrangement or assignment if they were obtained fraudulently or failed to meet legal requirements.
  • In summary, the Bankruptcy Act 1924 provides a comprehensive legal framework governing bankruptcy proceedings. It details the roles and responsibilities of debtors, creditors, and trustees. It establishes procedures for investigations, examinations, and the distribution of assets. And it sets out potential penalties for non-compliance with the Act's requirements. The Act aims to ensure a fair and orderly process for dealing with insolvent debtors and protecting the interests of creditors.

Legal classification tags

Area of Law
Insolvency Law
Instrument
Act
Concepts
Commencement Provisions
Repeal & Amendment
Delegation & Subordinate Legislation
Enforcement Powers
Rights & Protections
Administrative Discretion
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.