Bankruptcy Legislation Amendment (Debt Agreements) Act 2007 (44 of 2007)

Schedule 2   Amendments commencing on 1 July 2007

Bankruptcy Act 1966

43   After Division 3 of Part IX

Insert:

Division 3A - Duties of administrators

185LA Duties of an administrator - general

The duties of an administrator of a debt agreement include:

(a) dealing with the debtor’s property in the manner specified in the debt agreement; and

(b) giving information about the administration of the debt agreement to the debtor if the debtor makes a reasonable request for the information; and

(c) giving information about the administration of the debt agreement to a creditor who:

(i) is a party to the debt agreement; and

(ii) makes a reasonable request for the information.

185LB Administrator to notify creditors of a 3-month arrears default by a debtor

(1) If a 3-month arrears default by a debtor occurs at a particular time in relation to a debt agreement, the administrator of the debt agreement must notify, in writing, each creditor who is a party to the debt agreement of that occurrence within 10 working days of that occurrence.

(2) The administrator of a debt agreement is not required to give a notification under subsection (1) in respect of a 3-month arrears default (the first default ) if:

(a) one or more other 3-month arrears defaults by the debtor have occurred in relation to the debt agreement; and

(b) the 3-month period to which the first default relates overlaps with the 3-month period to which any of those other 3-month arrears defaults relate; and

(c) a notification under subsection (1) has already been given in respect of any of those other 3-month arrears defaults.

(3) For the purposes of this section, a 3-month arrears default by a debtor occurs at a particular time (the test time ) in relation to a debt agreement if:

(a) at the beginning of the 3-month period ending immediately before the test time, one or more payments in respect of provable debts became due and payable by the debtor under the debt agreement; and

(b) throughout that 3-month period, the debtor was in arrears in respect of any or all of those payments.

185LC Administrator to notify Official Receiver of a designated 6-month arrears default by a debtor

(1) If a designated 6-month arrears default by a debtor occurs at particular time in relation to a debt agreement, the administrator of the debt agreement must notify, in writing, the Official Receiver of that occurrence within 10 working days of that occurrence.

(2) The administrator of a debt agreement is not required to give a notification under subsection (1) in relation to the debt agreement if the administrator has already given such a notification in relation to the debt agreement.

(3) For the purposes of this Part, a designated 6-month arrears default by a debtor occurs at a particular time (the test time ) in relation to a debt agreement if:

(a) both of the following apply:

(i) before the test time, one or more payments in respect of provable debts became due and payable by the debtor under the debt agreement;

(ii) at no time during the 6-month period ending immediately before the test time were any obligations in respect of those payments discharged; or

(b) both of the following apply:

(i) at the test time, the obligations created by the debt agreement have not been discharged;

(ii) the last of those obligations should have been discharged at a time 6 months before the test time.

185LD Administrator to maintain separate bank account

(1) A person who is:

(a) either:

(i) a registered debt agreement administrator; or

(ii) a registered trustee; and

(b) the administrator of one or more debt agreements;

must pay all money received by the person from debtors under those debt agreements to the credit of a single interest-bearing bank account that:

(c) bears:

(i) the person’s own name; and

(ii) the words “ - Debt Agreement Administration Trust Account”; and

(d) complies with such other requirements (if any) as are specified in the regulations.

(2) The person must only pay into the account money received by the person from debtors under debt agreements.

(3) The person is entitled, in his or her personal capacity, to each payment of interest on the account, less an amount equal to the bank fees or charges (if any) paid or payable on the account during the period to which the interest relates.

(4) Interest on money in the account is not subject to taxation under a law of the Commonwealth, a State or a Territory except as provided in Part 2 of the Bankruptcy (Estate Charges) Act 1997.

185LE Administrator to keep accounts etc.

(1) An administrator of a debt agreement must:

(a) keep such accounts, books and records as are necessary to give a full and correct account of the administration of the debt agreement; and

(b) if required to do so by the Inspector-General - make those accounts and records available for inspection by the Inspector-General; and

(c) if required to do so by the Inspector-General - answer any inquiries about the debt agreement; and

(d) cooperate with any inquiry or investigation made by the Inspector-General under paragraph 12(1)(bb).

(2) If an administrator of one or more debt agreements is to be remunerated under those debt agreements, the administrator must:

(a) maintain a separate record of:

(i) money received by the administrator from the debtors in relation to those debt agreements; and

(ii) payments made by the administrator in relation to those debt agreements; and

(iii) the balance of money held by the administrator in relation to those debt agreements; and

(b) if the administrator maintains an account under subsection 185LD(1) - at least once every 45 days, reconcile the balance held in the subsection 185LD(1) account with the corresponding record maintained under paragraph (a).

185LF Succession of administrator

Scope

(1) This section applies if:

(a) a person (the earlier administrator ) ceases to be the administrator of a debt agreement; and

(b) another person (the later administrator ) becomes the administrator of the debt agreement in place of the earlier administrator.

Duty

(2) The earlier administrator must:

(a) prepare an account of:

(i) money received by the earlier administrator from the debtor in relation to the debt agreement; and

(ii) payments made by the earlier administrator in relation to the debt agreement; and

(b) keep a copy of the account; and

(c) give the later administrator:

(i) a copy of the account; and

(ii) a copy of any other accounts the earlier administrator received from a person who was the administrator of the debt agreement before the earlier administrator.

185LG Duties of an administrator in relation to debt agreements - extended meaning

(1) For the purposes of this Act, a duty of an administrator under this Act is taken to be a duty of an administrator in relation to a debt agreement, even if the duty does not relate to a particular debt agreement.

(2) If a person signs a certificate under subsection 185C(2D) in relation to a debt agreement proposal:

(a) the person must ensure that the certificate is correct; and

(b) for the purposes of this Act, the requirement set out in paragraph (a) is taken to be a duty of an administrator in relation to a debt agreement.

(3) For the purposes of this Act, a requirement set out in subsection 185LF(2) or 185N(5) is taken to be a duty of an administrator in relation to a debt agreement.