The Bankruptcy A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. is a Commonwealth Act that applies in all states and territories. The relevant courts are the Federal An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. and the Federal Circuit Court (s 27 Bankruptcy Act). The Family Court also has The authority of a court or tribunal to hear matters brought before it, based on some factor such as area or law, amount of money claimed, or geographic area. under the Bankruptcy Act where the trustee is a A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. to family law property or spousal Money paid to a person to financially support them. When a couple has separated both parents have a duty to support their children, and a court can order a parent to make regular payments to support the children. Maintenance for a spouse is now less common, and must be applied for within 12 months of a divorce. It is usually covered in a final settlement of all property. proceedings. Both the Federal Court and the Federal Circuit Court can transfer proceedings to the Family Court and the Family Court of Western Australia (ss 35, 35A, 35B When a debtor who cannot pay their debts has their money and property taken over and managed by a trustee who uses it to pay back creditors. The debtor is then called a bankrupt. Act). (For the contact details of these courts, see ‘Contacts’ at the end of this chapter.)
The Bankruptcy Act creates the roles of Inspector-General in Bankruptcy, Official Receiver, and Official Trustee in Bankruptcy. AFSA undertakes each of these roles. AFSA is an executive agency in the Attorney-General’s portfolio that manages the application of bankruptcy laws through the delivery of personal insolvency and trustee regulation and enforcement (see ‘Contacts’ at the end of this chapter).
When a person becomes bankrupt, all their Property belonging to a bankrupt that can be used to pay off debts. Some property such as tools or trade, ordinary household furniture and a low-value car are excluded from the property that can be taken and sold. See also bankruptcy. (see ‘Divisible property’, below) vests in (i.e. ownership rights are moved to) the Official Trustee in Bankruptcy (AFSA), which is the trustee for the majority of bankruptcies. Debtors who enter Done by your own free will. See also community treatment order (CTO). bankruptcy can nominate a private registered trustee to manage their bankruptcy. Current policy is to give preference to registered trustees over the official trustee.
The trustee can require a bankrupt to provide all financial documents and any other information relevant to the bankruptcy. The trustee can ask the bankrupt to hand over their passport.
A trustee in bankruptcy also has the power to:
- investigate the conduct and dealings of the bankrupt and the reason for bankruptcy; and
- seize and sell certain assets and distribute the proceeds.
AFSA’s website (www.afsa.gov.au) is very useful; it includes Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute., Found in a statute of delegated legislation. For example, a statutory authority or body is aperson or organisation that has special powers given by parliament to do work for the public benefit. forms, indexable amounts, statistics and comment on recent events.
AFSA as trustee vs a private trustee
A non-business bankrupt with no assets who has bankrupted via a debtor’s petition usually has AFSA as their trustee rather than a private trustee.
A private registered trustee usually becomes trustee at the request of a petitioning The person or organisation to whom a debtor owes a debt. or A person who owes a debt. before the debtor becomes bankrupt. In some cases the creditor can ask for a private registered trustee to replace AFSA as the trustee after the debtor becomes bankrupt (ss 156A, 157). It can be an advantage for a debtor to not have a private trustee, as the trustee’s fees can be significant.
Complaints about independent trustees
Anybody who is concerned about a trustee or any other aspect of their bankruptcy administration can complain to AFSA, which reports directly to the Inspector-General. AFSA A document that sets out what a person wants to happen to their money and other property after they die. investigate complaints against private trustees and against AFSA itself.