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Bankruptcy and Insolvency Glossary
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Act of bankruptcy |
an action or declaration which, if not carried through, can
be used by a creditor to apply to the Court to make you
bankrupt |
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Administration number |
a number issued by ITSA as a n identifier of each bankruptcy
or other proceeding. |
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Administrator |
an eligible person nominated by a debtor to handle a Debt
Agreement on their behalf. |
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Asset |
anything a person owns before going bankrupt, or buys or
receives during bankruptcy |
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Bankruptcy |
a process where people, who cannot pay their debts become
bankrupt to receive the protection of the Bankruptcy Act and
their estate is administred by a trustee. It allows for the
fair distribution of property among creditors and the
prosecution of dishonest debtors. |
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Bankruptcy Act |
the Commonwealth legislation which covers bankruptcy Part IX
Debt Agreements, Personal Insolvancy Agreements and Part X
arrangments. |
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Bankruptcy Offence |
an act by a person under the
Bankruptcy Act
that can lead to a person
being prosecuted, fined, imprisoned, or made to make
restitution. |
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Benefit |
a bankrupt may derive a benefit
from a number of sources. It could be a loan or a fringe
benefit or monies paid to a third person as a result of
exertion by a bankrupt. These types of benefits can be
included as a part of a bankrupts contribution assessment to
determine what contribution must be paid from a bankrupt's
income. |
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Creditor's Petition |
is a means by which a creditor
makes an application to the Court to make a debtor bankrupt |
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Controlling Trustee |
is a person who is a private
bankruptcy trustee, ITSA or an eligible solicitor who
investigates a debtor's financial affairs and calls a
meeting of the debtor's creditors under Part X of the
Bankruptcy Act. |
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Contribution |
a sum of money that a bankrupt
person is required to regularly pay to their trustee from
their income. It is normally called a compulsory
contribution and is based on a statute based formula. |
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Composition |
is one of the options that a
debtor offered to their creditors under Part X of the
Bankruptcy Act
to resolve their financial difficulties pre 1/12/04. |
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Court |
in the context of bankruptcy,
the Court usually refers to the Federal Court of Australia
or the Federal Magistrates Service. Both of these Courts can
hear matters associated with personal insolvency |
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Current Amounts |
these are amounts that are
periodically adjusted in accordance with the Consumer Price
Index. Some are adjusted every quarter, others every six
months. As an example they identify the value of assets that
can be retained by a bankrupt or the income a bankrupt can
retain before they are required by law to contribute towards
their bankruptcy. |
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Debt Agreement |
an arrangement between people
who cannot pay their debts. It is a formal arrangement under
Part IX of the
Bankruptcy Act. |
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Debtor |
a debtor is a person who owes
money to a creditor |
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Debtor's Petition |
an application made to ITSA to
become a bankrupt. The form to use is Form 6 |
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Divisible Assets
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assets/property which can
legally be sold in bankruptcy by the trustee. |
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Discharge |
the end of bankruptcy. The date
of discharge is the day after bankruptcy ends. The statutory
period of bankruptcy is three years and one day from when a
person files their Statement of Affairs at ITSA through the
Official Receiver. |
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Dividend |
this is a distribution that is
made to creditors from any asset or income realisations in
an administration under the
Bankruptcy Act. |
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Effective |
a s188 authority that has been
signed by both the debtor and the controlling trustee to
enable a meeting of the debtor's creditors to be called to
consider a Personal Insolvency Agreement. The authority does
not become effective until both parties have signed. |
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Examinable Affairs
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in relation to a person means
the person's dealings, transactions, property and affairs
and the financial affairs of an associated entity of the
person in so far as they are or appear to be, relevant to
the person or to any of his or her conduct, dealings,
transactions, property and affairs. |
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Exempt Assets |
assets/property which cannot be
sold in bankruptcy by the trustee. These are identified in
s116 of the Bankruptcy
Act. |
