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DEBTOR’S PETITION OVERHAUL – JANUARY 2020

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

An individual overwhelmed by debt (“the Debtor”) may seek the protection of the Bankruptcy Act 1966 (Cth) (“the Act”) and file a Debtor’s Petition.

Section 55 of the Act provides that an individual may present to the Official Receiver a petition against himself/herself in the approved form and accompanied by a Statement of Affairs which provides details of the person and sets out the person’s financial affairs. [...]  READ MORE →

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Three reasons why your debt collection efforts should not end when your debtor goes bankrupt

By Jeff Brown a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Most of us assume that the bankruptcy of a debtor that we are chasing for payment is the death knell for any return. It is true that in most cases the end result of bankruptcy is a minimal or zero return for unsecured creditors. However, there is a lot to say for putting in a relatively small effort to ensure that you are in the mix in case funds become available for distribution.

For example: [...]  READ MORE →

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I Object!: The Importance of Strict Compliance with the Notice of Objection Regime

By Bonnie McMahon an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In the recent decision of Jones and Inspector-general in Bankruptcy [2018] AATA 3260 (“Jones”), the Administrative Appeals Tribunal has made it clear that a trustee in bankruptcy who files a notice of objection to discharge, needs to comply strictly with the requirements of the s 149D(1) of the Bankruptcy Act 1966 (Cth) (“the Act”), otherwise it is likely that the decision will be cancelled on review, either by the Inspector-General in Bankruptcy or the Tribunal. [...]  READ MORE →

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How does a trustee in bankruptcy sell jointly owned property?

Trustees in bankruptcy can takes steps to be appointed trustees for sale of property jointly owned by the bankrupt estates to which they have been appointed. Just how they do it, will depend upon the law in each state or territory.

In the matter of Juratowitch (as Trustee of the Bankrupt Estates of Parolin and Parolin) v Parolin & Ors [2016] FCCA 3439 (“Juratowitch”), the issue regarding the granting of the ‘power of sale’ to a Trustee of a Bankrupt Estate where the property did not entirely vest in the Trustee was considered by the Federal Circuit Court of Australia. The trustee was trustee of 2 bankrupt estates, each of which was a 1/3rd owner of a property in Victoria. [...]  READ MORE →

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When is an old debt too old to collect?

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Sometimes, we are all a bit guilty of putting some of the more difficult to collect debts in the ‘too hard basket’ for too long. For so long that they become an ‘old debt’. But how long can you leave an old debt before it’s too late to collect? And the old debt becomes ‘statute barred’?

For debts in NSW, the clock generally starts running for a period of 6 years from the date the cause of action first accrues (e.g. the date of default). After the expiry of this 6 year period, the legislation restricts you from recovering the debt and it becomes ‘stature barred’. [...]  READ MORE →

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AFSA Offence Referral Update

Recent updates to the Alleged Offence Referral to AFSA template now provide for the inclusion of details of any person (individual or corporate) acting on behalf of, or assisting, a bankrupt or debtor. This can include a spouse, child, friend, accountant or lawyer assisting a bankrupt in an informal capacity, as is often the case.

As trustees are aware, they have a duty under section 19(1)(i) of the Bankruptcy Act 1966 to refer to AFSA any evidence of an offence committed by a bankrupt. However, there are often circumstances where it is unclear whether there is sufficient evidence to support an offence referral. AFSA has available a Pre Referral Enquiry (“PRE”) program that is a convenient and efficient way to deal with such matters. PREs can be as simple as emailing AFSA with a summary of the circumstances and suspected offence/s and are particularly useful: [...]  READ MORE →

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The Bankruptcy Loophole

By Bonnie McMahon, Solicitor, of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Creditors frustrated by a debtor entering into bankruptcy or a composition should remember that some claims can continued to be pursued, even after the debtor becomes bankrupt or enters a deed of composition with his or her creditors. Debtors in such actions may also need to be aware that going bankrupt may not bring the claims to an end.

Justice Emmett of the Supreme Court of New South Wales has provided some useful guidance in these matters. [...]  READ MORE →

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Special Delivery

By Bonnie McMahon a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

The Federal Court has recently considered the effect of special proxies in a judgment which is important for those considering how special proxies operate, both in corporate and in personal insolvency. The decision also disallowed retrospective approval of remuneration in bankruptcy, making only prospective fee approval available for trustees.

On 16 December 2015, a bankruptcy trustee held a creditor’s meeting (“the Creditor’s Meeting”), with the main purpose of considering and passing a resolution approving his remuneration. At this meeting the Trustee’s remuneration was approved, on the basis of certain special proxies in favour of the chairperson and minutes secretary. [...]  READ MORE →

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It’s personal – Bankruptcy and Life Insurance

By Andrew Ng an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

It is a long standing principle that a bankrupt should not be deprived of a right to recover compensation for injury or wrong done to the bankrupt as it would be “unjust and harsh that the estate of the bankrupt and the participating creditors should be swelled and advantaged by a wrong to the person or reputation of the bankrupt” (Moss v. Eaglestone [2011] NSWCA 404 per Allsop P at [64]) . This principle underpins the intention of the statutory framework set out in section 60(4) and section 116(2)(g) the Bankruptcy Act 1966 (Cth) (“the Act”). [...]  READ MORE →