Bankruptcy Legislation Amendment Act 2004
Act No. 80 of 2004 as amended
This compilation was prepared on 18 July 2005
[This Act was amended by Act No. 100 of 2005]
Amendment from Act No. 100 of 2005
[Schedule 2 (item 9) amended heading to item 167 of Schedule 1
Schedule 2 (item 9) commenced immediately after 1 December 2004]
Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Amendments relating to statements of affairs and Part X agreements
Part 1—Amendment of the Bankruptcy Act 1966
Division 1—Amendments relating to statements of affairs
Division 2—Amendments relating to Part X agreements
Part 2—Amendment of other Acts
Aboriginal and Torres Strait Islander Commission Act 1989
ACIS Administration Act 1999
Australian National University Act 1991
Corporations Act 2001
Customs Act 1901
Defence Act 1903
Export Market Development Grants Act 1997
Income Tax Assessment Act 1997
Petroleum Resource Rent Tax Assessment Act 1987
Proceeds of Crime Act 1987
Proceeds of Crime Act 2002
Social Security Act 1991
Student Assistance Act 1973
Superannuation Industry (Supervision) Act 1993
Tradex Scheme Act 1999
Witness Protection Act 1994
Part 3—Application and transitional provisions
Schedule 2—Amendments relating to compositions and schemes of arrangement
Bankruptcy Act 1966
Schedule 3—Amendments relating to performance standards
Bankruptcy Act 1966
Schedule 4—Amendments relating to voting documents
Bankruptcy Act 1966
Schedule 5—Amendments relating to notice of meetings
Bankruptcy Act 1966
Schedule 6—Minor and technical amendments
Bankruptcy Act 1966
Schedule 7—Amendment of the Bankruptcy Legislation Amendment Act 2002
An Act to amend the Bankruptcy Act 1966, and for other purposes
[Assented to 23 June 2004]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Bankruptcy Legislation Amendment Act 2004.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provision(s) | Commencement | Date/Details |
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day on which this Act receives the Royal Assent. | 23 June 2004 |
2. Schedules 1, 2, 3 and 4 | A single day to be fixed by Proclamation. However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. | 1 December 2004 (s 2(1); Gazette 2004, GN34) |
3. Schedule 5 | A single day to be fixed by Proclamation. However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. | 1 December 2004 (s 2(1); Gazette 2004, GN34) |
4. Schedule |
Overview
The Bankruptcy Legislation Amendment Act 2004, enacted by the Parliament of Australia and assented to on 23 June 2004, addresses gaps and issues in the existing bankruptcy framework, particularly focusing on personal insolvency agreements. The act introduces significant amendments to the Bankruptcy Act 1966, streamlining the processes and procedures surrounding personal insolvency agreements. It aims to provide a more efficient and transparent mechanism for debtors to manage their debts without necessarily undergoing full bankruptcy, thus offering a viable alternative for those seeking to avoid the stigma and severe consequences of bankruptcy. The act introduces new definitions, procedures, and conditions for personal insolvency agreements, ensuring they are binding on all creditors, and outlines processes for their variation, termination, and setting aside under specific conditions. Additionally, it mandates the registration and inspection of statements of affairs, ensuring transparency and accountability in the process.
Scope and Application
The Bankruptcy Legislation Amendment Act 2004 applies to individuals and entities who are subject to the provisions of the Bankruptcy Act 1966, specifically relating to personal insolvency agreements and other forms of debt relief. This Act is a Commonwealth legislation, meaning it applies nationally across Australia. The Act primarily amends the Bankruptcy Act 1966 to introduce personal insolvency agreements as a formalised process for debt relief, replacing the previous arrangements under deeds of arrangement, deeds of assignment, and compositions. The Act also makes corresponding amendments to other legislation to reflect these changes. The amendments introduced by the Act include defining terms such as "related entity," expanding the duties and responsibilities of controlling trustees, and setting out detailed procedures for the creation, variation, and termination of personal insolvency agreements. Additionally, the Act addresses transitional provisions for pre-commencement deeds, arrangements, and compositions, ensuring continuity in the application of the law during the transition period. The Act does not specify exclusions or thresholds but rather extends the application of the Bankruptcy Act 1966 to cover the new framework for personal insolvency agreements.
Key Provisions
- The Bankruptcy Legislation Amendment Act 2004 amends the Bankruptcy Act 1966 to introduce significant changes, primarily focusing on personal insolvency agreements (PIAs). The Act replaces previous terms such as "deed of assignment," "deed of arrangement," and "composition" with "personal insolvency agreement." It mandates that a PIA must identify the debtor's property and income available to creditors, specify how these will be managed and distributed, and detail the terms of the debtor's release from provable debts. It also outlines the process for creating, varying, and terminating a PIA, including the roles of the debtor, creditors, and the Court.
- The Act imposes various obligations on parties involved in the PIA process. For example, the controlling trustee must provide detailed reports to creditors, including information on related entities and declarations of relationships. Creditors are required to inspect statements of the debtor's affairs and can object to variations or terminations of PIAs proposed by the trustee. The debtor must provide a statement of affairs and a proposal for dealing with their affairs to the trustee before a PIA can be executed.
- Breaches of the Act's provisions can lead to civil and criminal consequences. For instance, if a PIA is set aside by the Court, any acts done in good faith under the PIA before the order remains valid. However, the Court can set aside a PIA if it finds the terms unreasonable, the agreement does not comply with the Act, or if the debtor provided false or misleading information. The Act also allows for the termination of a PIA by the trustee, creditors, or the Court under specific circumstances, such as the debtor being in default.
- The penalties for breaches can include the setting aside or termination of PIAs, with ancillary orders such as compensation payments. The Act also provides mechanisms for the discharge of obligations under a PIA and the distribution of remaining property to the debtor after all costs, debts, and interests are paid. It ensures that certain rights, such as those of secured creditors, are preserved even after the execution of a PIA.
- Area of Law
- Bankruptcy Law
- Insolvency Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Commencement Provisions
- Repeal & Amendment
- Regulatory Standards
- Civil Penalty Provisions
- Licensing & Registration
- Rights & Protections
- Prohibited Conduct
