Commonwealth Numbered Acts Commonwealth Numbered ActsPart 1 -- Length of debt agreements
1 After subsection 185C(2)
Insert:
(2AA) A debt agreement proposal must not provide for the debtor to make payments under the agreement, in respect of provable debts in relation to the agreement, after:
(a) 3 years beginning on the day the agreement is made; or
(b) if subsection (2AB) applies to the debtor--5 years beginning on the day the agreement is made.
Note: Section 185H deals with when a debt agreement is made.
(2AB) This subsection applies to the debtor if at the time the debtor gives the debt agreement proposal to the Official Receiver the debtor has an interest in real property in Australia that is a dwelling and is the debtor's principal place of residence, being an interest:
(a) that is an interest under a long-term lease; or
(b) that is any other legal or equitable estate or interest, except:
(i) an interest under a lease (other than a long-term lease); or
(ii) an interest under a licence; or
(iii) a life interest; or
(iv) an interest in an easement; or
(v) an interest held on trust for another person; or
(vi) an interest of a kind determined in an instrument under subsection (2AD) for the purposes of this subparagraph.
(2AC) If, in accordance with subsections (2AA) and (2AB), a debt agreement proposal provides for the debtor to make payments under the agreement, in respect of provable debts in relation to the agreement, after 3, but not after 5, years beginning on the day the agreement is made, the property identified under paragraph (2)(a) must not include any interest covered by subsection (2AB).
(2AD) The Minister may, by legislative instrument, determine a kind of interest for the purposes of subparagraph (2AB)(b)(vi).
2 Subsection 185C(5)
Insert:
"lease " includes a sublease.
"long-term lease " means a lease granted by the Commonwealth, a State or a Territory for a term (including any extension or renewal) that is reasonably likely, at the time the lease is granted, to exceed 20 years.
3 Paragraph 185E(2)(a)
After "185C(2),", insert "(2AA), (2AC),".
3A After subsection 185M(1C)
Insert:
(1D) The proposal must not seek to vary the agreement so that the agreement would provide for the debtor to make payments under the agreement, in respect of provable debts in relation to the agreement, after:
(a) 3 years beginning on the day the agreement was made; or
(b) if subsection (1DA) or (1DB) applies--5 years beginning on the day the agreement was made.
Note: Section 185H deals with when a debt agreement is made.
(1DA) This subsection applies if subsection 185C(2AB) applied to the debtor at the time the relevant debt agreement proposal was given to the Official Receiver.
(1DB) This subsection applies if:
(a) the proposal given to the Official Receiver is accompanied by a certificate signed by the administrator of the agreement stating that the administrator has reasonable grounds to believe:
(i) that the debtor has suffered a substantial change in circumstances after the agreement was made that was not foreseen at the time the agreement was made; and
(ii) that the debtor is not likely to be able to discharge the obligations created by the agreement as and when they fall due because of that change; and
(b) the proposal does not increase the total of the payments that the debtor would be required to make under the agreement.
4 Subsection 185M(2)
Omit "and (1B)", substitute ", (1B) and (1D)".
5 Application provisions
(1) The amendments of sections 185C and 185E of the Bankruptcy Act 1966 made by this Part apply in relation to debt agreement proposals given to the Official Receiver on or after the commencement of this item.
(2) The amendments of section 185M of the Bankruptcy Act 1966 made by this Part apply in relation to debt agreements that come into force on or after the commencement of this item, where the debt agreement proposals were given on or after that commencement.
Part 2 -- Proposals to vary debt agreements
6 At the end of section 185LA
Add:
(3) If an administrator of a debt agreement signs a certificate under paragraph 185M(1DB)(a) or subsection 185M(1F) in relation to a proposal to vary the agreement, the administrator has a duty to ensure that the certificate is correct.
7 After subsection 185M(1DB)
Insert:
(1E) If:
(a) subsection 185C(2AB) did not apply to the debtor at the time (the proposal time ) the relevant debt agreement proposal was given to the Official Receiver; and
(b) a person did not give a certificate under paragraph 185C(4C)(b) in relation to the relevant debt agreement proposal;
the proposal under subsection (1) of this section must not seek to vary the agreement so that the amount worked out using the following formula (expressed as a percentage) exceeds the percentage in effect under an instrument under subsection 185C(4B) at the proposal time:
(1F) The proposal given to the Official Receiver must be accompanied by a certificate signed by the administrator of the agreement stating that, having regard to:
(a) the circumstances in existence at the time the administrator signs the certificate; and
(b) any other relevant matters;
the administrator has reasonable grounds to believe that the debtor is likely to be able to discharge the obligations created by the agreement (as proposed to be varied) as and when they fall due.
8 Subsection 185M(2)
Omit "and (1D)", substitute ", (1D), (1E) and (1F)".
9 After subsection 185M(2)
Insert:
(2A) However, the Official Receiver is not required by subsection (2) to process the proposal if:
(a) the Official Receiver reasonably believes that complying with the agreement (as proposed to be varied) would cause undue hardship to the debtor; or
(b) the Official Receiver thinks that the creditors' interests would be better served by not processing the proposal.
(2B) If the Official Receiver decides not to process the proposal because of subsection (2A), the Official Receiver must give written notice of the decision, and the reasons for it, to:
(a) the debtor; and
(b) affected creditors who are known to the Official Receiver.
(2C) If the Official Receiver decides not to process the proposal because of subsection (2A), the debtor or an affected creditor may apply to the Administrative Appeals Tribunal for review of the decision.
10 At the end of section 185MA
Add:
(4) Paragraphs (2)(b) and (c) do not apply in relation to an affected creditor who:
(a) is the administrator of the debt agreement; or
(b) was, on becoming an affected creditor, a related entity of the administrator.
11 After subsection 185MC(1)
Insert:
(1A) For the purposes of paragraph (1)(b), disregard an affected creditor who:
(a) is the administrator of the debt agreement; or
(b) was, on becoming an affected creditor, a related entity of the administrator.
12 At the end of section 185MC
Add:
Offence
(6) A person commits an offence if:
(a) the person is the administrator of a debt agreement; and
(b) the person gives, or agrees or offers to give, to an affected creditor any valuable consideration; and
(c) the person does so with the intention of securing the affected creditor's acceptance or non-acceptance of the proposal to vary the agreement.
Penalty for contravention of this subsection: Imprisonment for 6 months .
13 Application provisions
(1) The amendment of section 185LA of the Bankruptcy Act 1966 made by this Part applies in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item.
(2) Subsection 185M(1E) of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item, where the debt agreement proposals were given under subsection 185C(1) of that Act on or after that commencement.
(3) Subsections 185M(1F) and (2A) to (2C) of the Bankruptcy Act 1966 , as inserted by this Part, apply in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item.
(4) The amendment of section 185MA of the Bankruptcy Act 1966 made by this Part applies in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item, where the debt agreement proposals were given under subsection 185C(1) of that Act on or after that commencement.
(5) Subsection 185MC(1A) of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item, where the debt agreement proposals were given under subsection 185C(1) of that Act on or after that commencement.
(6) Subsection 185MC(6) of the Bankruptcy Act 1966 , as added by this Part, applies in relation to proposals given to the Official Receiver under subsection 185M(1) of that Act on or after the commencement of this item.
Part 3 -- Proposals to terminate debt agreements
14 At the end of section 185PA
Add:
(4) Paragraphs (2)(b) and (c) do not apply in relation to an affected creditor who:
(a) is the administrator of the debt agreement; or
(b) was, on becoming an affected creditor, a related entity of the administrator.
15 After subsection 185PC(1)
Insert:
(1A) For the purposes of paragraph (1)(b), disregard an affected creditor who:
(a) is the administrator of the debt agreement; or
(b) was, on becoming an affected creditor, a related entity of the administrator.
16 At the end of section 185PC
Add:
Offence
(6) A person commits an offence if:
(a) the person is the administrator of a debt agreement; and
(b) the person gives, or agrees or offers to give, to an affected creditor any valuable consideration; and
(c) the person does so with the intention of securing the affected creditor's acceptance or non-acceptance of the proposal to terminate the agreement.
Penalty for contravention of this subsection: Imprisonment for 6 months .
17 Application provisions
(1) The amendment of section 185PA of the Bankruptcy Act 1966 made by this Part applies in relation to proposals given to the Official Receiver under subsection 185P(1) of that Act on or after the commencement of this item, where the debt agreement proposals were given under subsection 185C(1) of that Act on or after that commencement.
(2) Subsection 185PC(1A) of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to proposals given to the Official Receiver under subsection 185P(1) of that Act on or after the commencement of this item, where the debt agreement proposals were given under subsection 185C(1) of that Act on or after that commencement.
(3) Subsection 185PC(6) of the Bankruptcy Act 1966 , as added by this Part, applies in relation to proposals given to the Official Receiver under subsection 185P(1) of that Act on or after the commencement of this item.
Part 4 -- Court orders to terminate debt agreements
18 After paragraph 185Q(4)(b)
Insert:
(ba) that one of the following applies:
(i) the administrator of the agreement has contravened subsection 185EC(6) in relation to the relevant debt agreement proposal;
(ii) the administrator of the agreement has contravened subsection 185MC(6) in relation to the agreement, whether or not the proposal to vary the agreement was accepted;
(iii) the administrator of the agreement has contravened subsection 185PC(6) in relation to the agreement, where the proposal to terminate the agreement was not accepted; or
Part 5 -- Voiding debt agreements
19 Subsection 185T(2)
Omit "only if", substitute "on one or more of the following grounds".
20 Paragraph 185T(2)(a)
Omit "or" (last occurring).
21 At the end of subsection 185T(2)
Add:
; (c) an administrator of the debt agreement has committed a breach of duty in relation to the agreement;
(d) if the administrator of the debt agreement is a registered debt agreement administrator--the administrator has breached a condition determined in an instrument under subsection 186F(4) or 186G(2B);
(e) if the administrator of the debt agreement is a registered trustee--the administrator has breached a condition imposed under section 20-35 of Schedule 2, to the extent that the condition relates to the administration of debt agreements.
22 Application provision
The amendments made by this Part apply in relation to debt agreements that come into force on or after the commencement of this item.
Part 6 -- Debt agreement administrators to refer evidence of offences
23 At the end of subsection 185LA(1)
Add:
; and (d) considering whether the debtor has committed an offence against this Act; and
(e) referring to the Inspector-General or to relevant law enforcement authorities any evidence of an offence by the debtor against this Act.
24 Application provision
The amendment made by this Part applies in relation to debt agreements that come into force on or after the commencement of this item, where the debt agreement proposals were given on or after that commencement.
Part 7 -- Reporting requirements for debtors in arrears
25 Paragraph 185LB(3)(a)
After "payments", insert "(the due payments )".
26 Paragraph 185LB(3)(b)
Omit "those payments", substitute "the due payments".
27 At the end of subsection 185LB(3)
Add:
; and (c) either:
(i) the total amount that the debtor was so in arrears exceeds $300, or 20% of the total of all of the due payments at the beginning of that 3-month period, whichever is higher; or
(ii) if the total of all of the due payments at the beginning of that 3-month period was $300 or less--no payment was made in that period to reduce any of the due payments.
28 Application provision
The amendments made by this Part apply in relation to debt agreements that come into force on or after the commencement of this item.
Part 8 -- Alignment of offences
29 After subsection 185LD(2)
Insert:
(2A) The person must not pay any money out of the account otherwise than:
(a) for purposes related to the administration of debt agreements; or
(b) in accordance with this Act; or
(c) in accordance with a direction of the Court.
30 After section 185LD
Insert:
185LDA Offence relating to the trust account
A person commits an offence of strict liability if:
(a) the person is subject to a requirement under subsection 185LD(1), (2) or (2A); and
(b) the person fails to comply with the requirement.
Penalty: 50 penalty units.
31 After subsection 185LE(1)
Insert:
(1A) A person commits an offence of strict liability if:
(a) the person is subject to a requirement under paragraph (1)(a) or (b); and
(b) the person fails to comply with the requirement.
Penalty: 5 penalty units.
32 Subsection 277B(2) (after table item 6)
Insert:
| 7 | subsection 185LE(1A) | 1 penalty unit |
33 Application provisions
(1) Subsection 185LD(2A) of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to:
(a) debt agreements that come into force on or after the commencement of this item; and
(b) debt agreements that were in force immediately before that commencement.
(2) Section 185LDA of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to:
(a) to the extent that section relates to subsection 185LD(1) or (2) of that Act--money received on or after the commencement of this item; and
(b) to the extent that section relates to subsection 185LD(2A) of that Act--money paid out of the account on or after the commencement of this item.
(3) Subsection 185LE(1A) of the Bankruptcy Act 1966 , as inserted by this Part, applies in relation to debt agreements that come into force on or after the commencement of this item.
Part 9 -- Time for submitting annual returns
34 Subsection 185LEA(1)
Omit "35 days", substitute "25 business days".
35 Application provision
The amendment made by this Part applies in relation to financial years ending after the commencement of this item.