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Proposed Amendments to Part X of the Bankruptcy
Act
The following information extracts from information received
from ITSA on these changes
"The Bankruptcy Legislation Amendment Bill 2004 was
introduced into Parliament on 24 March 2004. This Bill deals
principally with changes to Part X of the Bankruptcy Act arising
from the Part X review that was conducted by ITSA and the
Attorney-General's Department last year. The objective of
these amendments is to enhance the integrity of Part X arrangements
and streamline their operation. This Bill also contains some
changes to Sec 73 Composition Proposals and some minor/technical
amendments to all meeting and voting processes.
Brief Overview of Changes - BLAB 04
The 3 types of Part X arrangements (Deed of Assignments,
Deed of Arrangements, Compositions) are being abolished and
will be replaced by a single type of agreement called a Personal
Insolvency Agreement (PIA). The PIA can be very flexible and
the debtor can choose to incorporate various elements of the
old types of arrangements - eg. whether all/part of the property
is available for creditors, whether the antecedent transactions
apply, whether any of his income will be available, etc. The
debtor could also elect to choose a different rate of dividend
for different classes of creditors or choose to elect not
to be released from particular provable debts. The creditors
will still be required to agree, by special resolution, to
the debtor's proposals.
Debtors (Part X, Bankruptcy, and Debt Agreements) will now
need to disclose any relationships with creditors on their
Statement of Affairs. A new S/A form will have to be developed
for this purpose.
Controlling Trustees and Registered Trustees will be required
to disclose any relationship that they may have with the debtor.
Registered trustees and solicitors who act as controlling
trustees will be required to meet fundamental performance
standards in the performance of their duties. These new standards
will be a part of the Bankruptcy Act Regulations.
Solicitors who wish to act as Controlling Trustees will now
need to 'qualify' by passing an educational course approved
by the Inspector General."
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