Bankruptcy and Liquidation
A useful publication for those who do not practise regularly in this area of law but need to advise clients generally on the workings of insolvency law for individuals and companies.
Recent updates can be viewed on Obiter - our News & Updates site.
Precedents include:
- Initial letter to debtor client with explanation of bankruptcy
- Example content for an application for winding up
- Example content for affidavit in support of application for winding up
- Example content for an application to set aside a statutory demand
- Example content for an affidavit in support of setting aside a statutory demand
Guides in this publication
MATTER PLAN
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“ Contents Overview3 ”
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“ A full commentary on the law and practice as it currently applies to personal bankruptcy. Contents ”
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“ This article summarises the basic information conveyed in conference to insolvent individuals (‘debtors’) who, as a means of solving their debt problems, need to decide between becoming a bankrupt or entering into an arrangement with their creditors. Bankruptcy ”
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“ Much has been written about the alternative courses of action available to the Australian Taxation Office (ATO) in collecting outstanding taxes and the aggressive attitude being adopted by it in effecting debt recoveries. In this paper, we focus attention on the New South Wales Office of State ... ”
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“ The Tax Laws Amendment (2012 Measures No.2) Bill 2012 received royal assent on 29 June 2012 and has commenced operation. This bill extends the existing director penalty notice (DPN) regime to make directors personally liable for their company’s unpaid superannuation in addition to pay as you go ... ”
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“ You may have noticed the occasional reference in the media to fraudulent phoenix activity and attempts by government agencies such as ASIC (Australian Securities and Investments Commission) and the ATO (Australian Taxation Office) to ‘crackdown’ on serial offenders, particularly in the building ... ”
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“ Introduction Debtors facing bankruptcy often ask questions about the amount of income they can earn as a bankrupt and whether they can retain surplus income that might be accumulated during the period of their bankruptcy. The purpose of this newsletter is to explain the operation of the income ... ”
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“ Introduction Winding up a company that acts as the trustee of a trust is a common occurrence. Many of the underlying principles in liquidating a corporate trustee have long been established. However, the circumstances in which a liquidator has the power to deal with trust property still lack ... ”
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“ The Director Penalty Regime was introduced to give the Australian Taxation Office (ATO) power to make company directors personally liable for certain unpaid company taxation debts. It is imperative that company directors and their advisors understand the regime and its operation, in order that ... ”
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“ Directors beware The Director Penalty Regime (‘the Regime’) was introduced to give the Australian Taxation Office (‘ATO’) power to make company directors personally liable for certain unpaid company taxation debts. It is imperative that company directors and their advisors understand the Regime ... ”
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“ Introduction This article, which is designed to be used as a resource by business owners, directors, accountants and financial advisors, sets out some of the warning signs of insolvency that can be observed by ordinary business people on a day to day basis, as well as outlining the serious ... ”
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“ Introduction The Voluntary Administration process is regulated by the Corporations Act 2001 (Cth) (‘the Act’) and provides for the business, property and affairs of an insolvent company to be administered in a way that: ”
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“ ‘There is always death and taxes: however, death doesn’t get worse every year’– author unknown Based upon our recent experiences, it would appear that the Australian Taxation Office (‘ATO’) is becoming much more aggressive in relation to the collection of overdue PAYG and taxes. More ... ”
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“ A Review of Debt Advisory in 2015 In recent years, an industry has developed around the perceived needs of company directors and individuals to receive commercial advice prior to the appointment of an administrator, liquidator or bankruptcy trustee. Such advice is sought in the expectation that ... ”
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“ A Guide to Director’s Duties Introduction ”
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“ Introduction Owners of insolvent or potentially insolvent businesses regularly express concern about the effect liquidation or bankruptcy will have upon their employees, especially if insufficient assets are available to pay entitlements. As a result, they often delay taking the necessary action ... ”
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“ Introduction Two decisions from the Supreme Court of New South Wales may be of interest to some readers. Although these decisions have been much commented upon within the insolvency industry, we have noted that the implications of these decisions may not have been broadly disseminated to others. ... ”
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“ National Personal Insolvency Index (NPII) Information for debt agreement administrators – Australian Financial Security Authority (AFSA) ”
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“ Personal Property Securities – Guide Family Law – Guide ”
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“ Insolvency means the inability to pay all debts as and when they fall due. A person who is insolvent may go bankrupt. A company which is insolvent may go into liquidation or as is commonly said be wound up. The tests of insolvency are usually a cash flow test or a balance sheet test. ”
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“ Separate legislation deals with personal insolvency and corporate insolvency. Personal insolvency is the subject of the: ”
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“ The word bankrupt has its origins in middle ages Italian banco rotto meaning broken bench referring to the practice of breaking a traders table to prevent further trading. The harsh treatment of bankrupts from the slavery of their wives and children to the seizure of property and imprisonment of ... ”
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“ The Federal Court of Australia and the Federal Circuit Court have concurrent jurisdiction: s 27 Bankruptcy Act. This is exclusive except for the jurisdiction of the High Court and the Family Court. Proceedings may be transferred to the Family Court which then exercises jurisdiction in bankruptcy ... ”
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“ Acts of bankruptcy are found in s 40 Bankruptcy Act. An act of bankruptcy is evidence that a debtor is insolvent. There are 21 such acts, including filing a debtor's petition and non-compliance with a bankruptcy notice. Failures to execute a personal insolvency agreement or a breach or termination ... ”
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“ A bankrupt is a person against whose estate a sequestration order has been made known as involuntary bankruptcy as against a person who is insolvent and has presented a debtor’s petition which is accepted by the official receiver. This is known as a voluntary bankruptcy. Approximately 90% of ... ”
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“ Section 115 Commencement of bankruptcy The petition must be presented within six months of the act of bankruptcy upon which it is based and the bankruptcy commences on the day of that act of bankruptcy. This time period cannot be changed. Bankruptcy is not a debt collection procedure and before a ... ”
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“ For the ordinary person with few divisible assets and an average income bankruptcy will have a limited impact. There still is a stigma and embarrassment associated with being a bankrupt which most of us would prefer to avoid however there is a great relief in being freed of the often overwhelming ... ”
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“ Transactions that may be void against the trustee are; Transaction not for full value s 120. ”
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“ A transferee who acquires property in good faith at market value has no concerns. Further even if the transferee has to return the property the trustee must refund the consideration paid for the transfer. See s 120(4). The position of spouses needs to be considered. In the case of assets, put in ... ”
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“ A trustee is the only party able to institute proceedings and is subject to a limitation period of 6 years from the date of bankruptcy except in the case of transfers to defeat creditors under s 121, which may be commenced at any time. It is not relevant to the proceedings that the debtor has been ... ”
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“ The Bankruptcy Act provides that the vesting of property under the act, including Part X agreements, is subject to an order of the Family Court in relation to property, spousal maintenance and maintenance agreements under Parts VIII or VIIIAB of the Family Law Act but not financial agreements ... ”
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“ The Bankruptcy Act in Division 4B provides for the assessment of the income of a bankrupt and if it exceeds the threshold for payment of a contribution to the estate. This can be enforced by way of notice which in effect garnishees wages or a bank account. The contribution formula is designed to ... ”
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“ The essential difference between an agreement and a deed is that of consideration. An agreement must have consideration moving between the parties. It usually involves a promise made for a promise - for example, I will transfer ownership of this horse to you in return for payment of $1,000. ”
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“ Firstly a mechanism is provided under Part IV Division 2A Bankruptcy Act by which a debtor can get a 21 day breathing space from the pressure of his creditors in which to consider the alternatives to bankruptcy that might be available. This is sought by the filing of a declaration under s 54A with ... ”
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“ Since 20 October 2014 all documents in new proceedings should be filed electronically. If this is not possible there is the facility for filing paper documents. Normally the creditor files a creditor’s petition for sequestration of the debtor’s estate following non compliance with a bankruptcy ... ”
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“ The minimum debt was $2,000 up to 11 August 2010 when it was increased to $5,000, and the date of the judgment must be within six years of the date of the bankruptcy notice (s 41). ”
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“ Prior to lodging an application for a bankruptcy notice, a search of the National Personal Insolvency Index (NPII) is recommended. This search will show whether the debtor is already bankrupt or a party to a debt agreement or a personal insolvency agreement. A bankruptcy notice is a formal notice ... ”
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“ The creditor must file the petition form within six months of the act of bankruptcy, which in most cases is for non-compliance with the bankruptcy notice. Whilst a notice may be served by mail DX or fax as well as personally r 16.01 provides a petition must be served personally. Substituted ... ”
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“ Part IX Bankruptcy Act is designed to provide a solution for insolvent debtors with only a few assets, a small debt and low incomes as an alternative to what is commonly called consumer bankruptcy. The insolvent debtor gives to the official receiver a proposal for a debt agreement in the approved ... ”
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“ An insolvent person may, rather than present a debtor’s petition or await a creditor’s petition propose an agreement to creditors under Part X of the Bankruptcy Act. These agreements, when properly established bind all creditors, which can be contrasted with an agreement with a particular creditor, ... ”
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