Bankruptcy Part X: Personal Insolvency Agreements (s188)

BANKRUPTCY ACT 1966 - SECT 188

Debtor may authorise trustee or solicitor to be controlling trustee

             (1)  A debtor who desires that his or her affairs be dealt with under this Part without his or her estate being sequestrated and:

                     (a)  is personally present or ordinarily resident in Australia;

                     (b)  has a dwelling-house or place of business in Australia;

                     (c)  is carrying on business in Australia, either personally or by means of an agent or manager; or

                     (d)  is a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;

may sign an authority in accordance with the approved form naming and authorising a registered trustee, a solicitor or the Official Trustee to call a meeting of the debtor's creditors and to take control of the debtor's property.

             (2)  An authority signed by a debtor under this section is not effective for the purposes of this Part unless:

                     (a)  if the person authorised is a registered trustee or solicitor--the person has consented in writing to exercise the powers given by the authority; and

                    (aa)  if the person authorised is the Official Trustee--an Official Receiver has given the debtor written approval to name the Official Trustee in the authority.

       (2AA)  If the person authorised is a registered trustee or a solicitor, then, before the person consents to exercise the powers given by the authority, the person must give the debtor the information prescribed by the regulations.

       (2AB)  If the person authorised is the Official Trustee, then, before the Official Receiver gives approval to name the Official Trustee in the authority, the Official Receiver must give the debtor the information prescribed by the regulations.

          (2A)  The regulations may prescribe the circumstances in which a person (other than the Official Trustee or a registered trustee) is ineligible to act as a controlling trustee under this Part.

          (2B)  An authority signed by a debtor under this section is not effective for the purposes of this Part if, at the time the authority is signed, the person authorised:

                     (a)  is not the Official Trustee or a registered trustee; and

                     (b)  is ineligible, under the regulations, to act as a controlling trustee under this Part.

          (2C)  If the person authorised is a registered trustee or solicitor, the authority signed by the debtor under this section is not effective for the purposes of this Part unless, before the person authorised consents to exercise the powers given by the authority, the debtor gives to the person authorised:

                     (a)  a statement of the debtor's affairs; and

                     (b)  a proposal for dealing with them under this Part.

Note:          Section 6A sets out requirements for statements of affairs.

          (2D)  If the person authorised is the Official Trustee, the authority signed by the debtor under this section is not effective for the purposes of this Part unless, before an Official Receiver gives approval to name the Official Trustee in the authority, the debtor gives to the Official Receiver:

                     (a)  a statement of the debtor's affairs; and

                     (b)  a proposal for dealing with them under this Part.

Note:          Section 6A sets out requirements for statements of affairs.

          (2E)  A proposal for dealing with the debtor's affairs under this Part must include a draft personal insolvency agreement.

Note:          Section 188A sets out requirements for personal insolvency agreements.

             (3)  An authority under this section that is effective for the purposes of this Part is not revocable by the debtor.

             (4)  Subject to subsection 192(1), a debtor cannot give an authority within 6 months of giving another authority, unless the Court grants leave to do so.

             (5)  A registered trustee or solicitor who consents to exercise the powers given by an authority must, within 2 business days of consenting, give a copy of:

                     (a)  the authority; and

                     (b)  the debtor's statement of affairs;

to the Official Receiver.

             (6)  When an authority becomes effective, the person authorised by it becomes the controlling trustee.

Source: http://classic.austlii.edu.au/au/legis/cth/consol_act/ba1966142/s188.html

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