The Insolvency Act 2006 came into force on 3 December, replacing the Insolvency Act 1967.
The changes made by the new Act include:
A new alternative to bankruptcy. Consumer-type debtors can seek entry into the No Asset Procedure (NAP) if they have no assets of any realisable value, no means of repaying their creditors, debts of between $1,000 and $40,000, have not been bankrupt or entered the NAP before, and have no trust involvement.
Responsibility for administration of the Summary Instalment Order (SIO) regime is transferred from the District Court to the Official Assignee. SIOs give debtors with the means to pay their creditors a time frame to do so in order to avoid bankruptcy. The debt threshold for SIOs is increased to $40,000, with the period for repayment capable of being extended to five years under special circumstances.
Responsibility for receipt of debtor petitions for bankruptcy is transferred to the Official Assignee.
Entry into bankruptcy, NAP or SIO requires debtors to submit a Statement of Affairs with the application, which can be completed either manually or electronically.
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This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.