Bankruptcy Act 1966

In force

Administered by

Department of the Treasury

Superseded version

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C2018C00326 C80

01 July 2018 - 25 October 2018

Table of contents

Part I—Preliminary
- 1 Short title
- 2 Commencement
- 4 Repeal
- 4A Insolvency Practice Schedule
Part IA—Interpretation
- 5 Interpretation
- 5A Acting in accordance with a person’s directions or instructions
- 5B Associated entities: companies
- 5C Associated entities: natural persons
- 5D Associated entities: partnerships
- 5E Associated entities: trusts
- 5F Controlling an entity in relation to a matter
- 5G Financial affairs of a company
- 5H Financial affairs of a natural person
- 5J Financial affairs of a partnership
- 5K Financial affairs of a trust
- 6 Meaning of intent to defraud creditors
- 6A Statement of affairs for purposes other than Part XI
- 6B Provision of statement of affairs under Part XI and statement of administration of estate of deceased person
- 6C Interpretive provisions relating to proceeds of crime orders
- 6D Approved forms
Part IB—Application of Act
- 7 Application of Act
- 7A Application of the Criminal Code
- 8 Act binds the Crown
- 9 Laws of States and Territories not affected by Act
- 9A Act does not extend to Norfolk Island
Part II—Administration
- Division 1—General
- Division 2—Common Investment Fund
- 20A Interpretation
- 20B The Common Investment Fund
- 20D Investment of money in Common Fund
- 20E Borrowing for the Common Fund
- 20F Moneys in Common Fund not held on account of particular estates etc.
- 20G Common Investment Fund Equalization Account
- 20H Credits to and debits from the Equalization Account
- 20J Interest on moneys in Common Fund payable only in certain circumstances
Part III—Courts
- Division 2—Jurisdiction and powers of courts in bankruptcy
Part IV—Proceedings in connexion with bankruptcy
- Division 1—Acts of bankruptcy
- Division 2—Creditors’ petitions
- Division 2A—Declaration of intention to present debtor’s petition
- Division 3—Debtors’ petitions
- Division 4—Effect of bankruptcy on property and proceedings
- Division 6—Composition or arrangement with creditors
Part V—Control over person and property of debtors and bankrupts
- Division 1—General
- Division 2—Offshore information notices
- Division 3—Failure to comply with certain notices
  - 81G Effect of non compliance with notice
Part VI—Administration of property
- Division 1—Proof of debts
  - 82 Debts provable in bankruptcy
  - 83 Debt not to be considered proved until admitted
  - 84 Manner of proving debts
  - 85 Proof by employees
  - 86 Mutual credit and set off
  - 87 Deduction of discounts
  - 88 Apportionment to principal and interest of payments made before bankruptcy
  - 89 Apportionment where security realized before or after bankruptcy
  - 90 Proof of debt by secured creditor
  - 91 Redemption of security by trustee etc.
  - 92 Amendment of valuation
  - 93 Repayment of excess
  - 94 Subsequent realization of security
  - 95 Proof in respect of distinct contracts
  - 96 Proof in respect of proportionate part of periodical payment
  - 97 Production of bills of exchange and promissory notes
  - 98 Amendment of proof of debt
  - 100 Costs of proving debts etc.
  - 101 Inspection of proofs by creditors etc.
  - 102 Admission or rejection of proofs
  - 103 Debts to be rounded down to nearest dollar
  - 104 Appeal against decision of trustee in respect of proof
  - 105 Costs of appeal
  - 106 Trustee may administer oaths etc.
  - 107 Creditor not to receive more than the amount of his or her debt and interest
- Division 2—Order of payment of debts
  - Subdivision A—General
  - Subdivision B—The effect of proceeds of crime orders and applications for proceeds of crime orders
  - 114A The effect of proceeds of crime orders
  - 114B The effect of applications for proceeds of crime orders
  - 114C Director of Public Prosecutions or Commissioner of the Australian Federal Police must notify the trustee of certain matters
- Division 3—Property available for payment of debts
- Subdivision A—General
  - 115 Commencement of bankruptcy
  - 116 Property divisible among creditors
  - 117 Policies of insurance against liabilities to third parties
  - 118 Execution by creditor against property of debtor who becomes a bankrupt etc.
  - 119 Duties of sheriff after receiving notice of presentation of petition etc.
  - 119A Duties of sheriff after receiving notice of bankruptcy etc.
  - 120 Undervalued transactions
  - 121 Transfers to defeat creditors
  - 121A Transactions where consideration given to a third party
  - 122 Avoidance of preferences
  - 123 Protection of certain transfers of property against relation back etc.
  - 124 Protection of certain payments to bankrupt etc.
  - 125 Certain accounts of undischarged bankrupt
  - 126 Dealings with undischarged bankrupt in respect of after acquired property
  - 127 Limitation of time for making claims by trustee etc.
  - 128 Notice to trustee where identity of vendor etc. with bankrupt in doubt
- Subdivision B—Superannuation contributions
  - 128A Simplified outline
  - 128B Superannuation contributions made to defeat creditors—contributor is a person who later becomes a bankrupt
  - 128C Superannuation contributions made to defeat creditors—contributor is a third party
  - 128D Time for making claims by trustee
  - 128E Superannuation account freezing notice
  - 128F Revocation of superannuation account freezing notice
  - 128G Copy of superannuation account freezing notice to be given to trustee etc.
  - 128H Consent of Official Receiver to the cashing etc. of a superannuation interest
  - 128J Power of Court to set aside superannuation account freezing notice
  - 128K Judicial enforcement of superannuation account freezing notices
  - 128L Protection of trustee of eligible superannuation plan
  - 128M References to a member of an eligible superannuation plan
  - 128N Definitions
- Division 4—Realization of property
- 129 Trustee to take possession of property of bankrupt
- 129AA Time limit for realising property
- 129A Eligible judges
- 130 Warrant for seizure of property connected with the bankrupt
- 132 Vesting and transfer of property
- 133 Disclaimer of onerous property
- 134 Powers exercisable at discretion of trustee
- 136 Right to pay off mortgages
- 137 Right of trustee to inspect goods held as security
- 138 Limitation of trustee’s power in respect of copyright, patents etc.
- 139 Protection of trustee from personal liability in certain cases
- Division 4A—Orders in relation to property of entity controlled by bankrupt or from which bankrupt derived a benefit
- 139A Trustee may apply to Court
- 139B Application to be served on respondent entity
- 139C Who may appear at hearing
- 139CA Definition of examinable period
- 139D Order relating to property of entity other than a natural person
- 139DA Order relating to property of natural person
- 139E Order relating to net worth of entity other than a natural person
- 139EA Order relating to increase in value of property of natural person
- 139F Court to take account of interests of other persons
- 139G Giving effect to orders under this Division
- 139H Entity entitled to claim in bankruptcy
- Division 4B—Contribution by bankrupt and recovery of property
- Subdivision A—Preliminary
  - 139J Objects of Division
- Subdivision B—Interpretation
  - 139K Definitions
- Subdivision C—Income
  - 139L Meaning of income
  - 139M Derivation of income
  - 139N Income varied by income tax payments and refunds and child support payments
- Subdivision D—Liability of bankrupt to pay contributions
  - 139P Liability of bankrupt to pay contribution
  - 139Q Change in liability of bankrupt
  - 139R Liability not affected by subsequent discharge
  - 139S Contribution payable by bankrupt
  - 139T Determination of higher income threshold in cases of hardship
- Subdivision E—Provision of information to trustee
  - 139U Bankrupt to provide evidence of income
  - 139V Power of trustee to require bankrupt to provide additional evidence
- Subdivision F—Assessments of income and contribution
  - 139W Assessment of bankrupt’s income and contribution
  - 139WA No time limit on making assessment
  - 139X Basis of assessments
  - 139Y Trustee may regard bankrupt as receiving reasonable remuneration
  - 139Z If bankrupt claims not to be in receipt of income
- Subdivision G—Review of assessment
  - 139ZA Internal review of assessment
  - 139ZC Inspector General may request further information
  - 139ZD Decision on review
  - 139ZE Inspector General to notify bankrupt and trustee of decision
  - 139ZF Review of assessment decisions
- Subdivision H—When contribution payable
  - 139ZG Payment of contribution
  - 139ZH If excess contribution paid
  - 139ZI Notice of determinations
- Subdivision HA—Supervised account regime
  - 139ZIA Objects
  - 139ZIB Definitions
  - 139ZIC Trustee may determine that the supervised account regime applies to the bankrupt
  - 139ZID Revocation of determination
  - 139ZIDA When determination ceases to be in force
  - 139ZIE Bankrupt must open and maintain supervised account
  - 139ZIEA New supervised account
  - 139ZIF Bankrupt’s monetary income to be deposited to supervised account
  - 139ZIG Trustee to supervise withdrawals from supervised account
  - 139ZIH Constructive income receipt arrangements
  - 139ZIHA Non monetary income receipt arrangements
  - 139ZII Cash income
  - 139ZIIA Keeping of books
  - 139ZIJ Injunctions
  - 139ZIK Interim injunctions
  - 139ZIL Discharge etc. of injunctions
  - 139ZIM Certain limits on granting injunctions not to apply
  - 139ZIN Other powers of the Court unaffected
  - 139ZIO Inspector General may review trustee’s decision
  - 139ZIP Inspector General may request further information
  - 139ZIR Inspector General’s decision on review
  - 139ZIS Inspector General to notify bankrupt and trustee of decision
  - 139ZIT AAT review of decisions
- Subdivision I—Collection of money or property by Official Receiver from person other than the bankrupt
  - 139ZJ Definition
  - 139ZK Persons to whom Subdivision applies
  - 139ZL Official Receiver may require persons to make payments
  - 139ZM Power of Court to set aside notice
  - 139ZN Charge over property
  - 139ZO Failure to comply with notice
  - 139ZP Employer not to dismiss or injure bankrupt because of giving of notice
- Subdivision J—Collection of money or property by Official Receiver from party to transaction that is void against the trustee
  - 139ZQ Official Receiver may require payment
  - 139ZR Charge over property
  - 139ZS Power of Court to set aside notice
  - 139ZT Failure to comply with notice
- Subdivision K—Rolled over superannuation interests etc.
  - 139ZU Order relating to rolled over superannuation interests etc.
  - 139ZV Enforcement of order
  - 139ZW Definitions
- Division 5—Distribution of property
- 140 Declaration and distribution of dividends
- 141 Joint and separate dividends
- 142 Apportionment of expenses of administration of joint and separate estates
- 143 Provision to be made for creditors residing at a distance etc.
- 144 Right of creditor who has not proved debt before declaration of dividend
- 145 Final dividend
- 146 Distribution of dividends where bankrupt fails to file statement of affairs
- 147 No action for dividend
Part VII—Discharge and annulment
- Division 1—Preliminary
  - 148 Misleading conduct by bankrupt
- Division 2—Discharge by operation of law
- Division 4—Provisions applicable to all discharges
  - 152 Discharged bankrupt to give assistance
  - 153 Effect of discharge
- Division 5—Annulment of bankruptcy
Part VIII—Trustees
- Division 1—Appointment and official name
- Division 2—Remuneration and costs of the Official Trustee and Official Receiver
  - 163 Remuneration of the Official Trustee
  - 163A Costs and expenses of Official Receiver
- Division 5—Vacation of office
Part IX—Debt agreements
- Division 1—Introduction
  - 185 Definitions
- Division 2—Debt agreement proposals
- Division 3—Making a debt agreement
- Division 3A—Duties of administrators
- Division 4—Varying a debt agreement
- Division 5—Ending a debt agreement
- Division 6—Voiding a debt agreement
- Division 7—General provisions relating to debt agreements
- Division 8—Registration of debt agreement administrators etc.
Part X—Personal insolvency agreements
- Division 1—Interpretation
  - 187 Interpretation
  - 187A Application of Part to joint debtors
- Division 2—Meeting of creditors and control of debtor’s property
- Division 3—General provisions
Part XI—Administration of estates of deceased persons in bankruptcy
- 244 Administration of estates under this Part upon petition by creditor
- 245 Debtor dying after presentation of creditor’s petition
- 246 Statement of deceased debtor’s affairs etc. by legal personal representative
- 247 Petition for administration under this Part by person administering deceased person’s estate
- 247A Commencement of administration under Part
- 248 Application of Act in relation to administrations under this Part
- 248A Consolidation of proceedings
- 249 Vesting of property on making of order
- 249A Charge over property owned in joint tenancy
- 250 Effect of order under Part where deceased person was bankrupt
- 251 Real property devised by will that vests directly in devisee to form part of estate in certain cases
- 252 Liability of legal personal representative
- 252A Annulment on payment of debts
- 252B Annulment by Court
- 252C Effect of annulment
Part XIA—Farmers’ debts assistance
- 253A Interpretation
- 253B Law of State or Territory may be proclaimed
- 253C Notice about stay under proclaimed law
- 253E Relevant authority may apply for stay of proceedings under certain petitions
- 253F Relevant authority may be heard on application relating to debtor’s petition
Part XII—Unclaimed dividends or moneys
- 254 Payment of unclaimed moneys to the Commonwealth
Part XIII—Evidence
- 255 Record of proceedings or evidence
- 256 Evidence of matters stated in notices published in Gazette
- 257 Evidence of proceedings at meetings of creditors or committee of inspection
- 258 Presumption about due convening of meetings etc.
- 262 Swearing of affidavits
Part XIV—Offences
- 263 Concealment etc. of property etc.
- 263A False affidavits
- 263C False claims about a creditor’s entitlement to vote
- 264A Failure of person to attend before the Court etc.
- 264B Arrest of person failing to attend before the Court etc.
- 264C Refusal to be sworn or give evidence etc.
- 264D Prevarication or evasion in the course of examination
- 264E Offences in relation to Registrar or magistrate conducting an examination
- 265 Failure of bankrupt or debtor to disclose property etc.
- 265A Offences relating to exercise of powers under section 77A or 130
- 266 Disposing or charging of property by person who becomes, or has become, a bankrupt
- 267 False declaration by debtor or bankrupt
- 267B Failure of person to provide information
- 267D Failure of person to attend
- 267E Arrest of person failing to attend before Official Receiver or authorised officer
- 267F Refusal to be sworn or give evidence etc.
- 267G Prevarication or evasion in the course of giving evidence
- 268 Offences in relation to personal insolvency agreements
- 269 Bankrupt or debtor who is a party to a debt agreement obtaining credit etc. without disclosing bankruptcy or debt agreement
- 270 Failure to keep proper books of account
- 271 Gambling or hazardous speculations
- 272 Leaving Australia with intent to defeat creditors etc.
- 273 Trial of offences constituted by refusal, failure or omission to act
- 275 Criminal liability not affected by discharge etc.
- 276 Trustee acting under a personal insolvency agreement that has been set aside
- 277 Punishment of contempt of court
- 277A Keeping of books in respect of period of bankruptcy
- 277B Infringement notices for offences
Part XV—Provisions relating to the Bankruptcy (Estate Charges) Act 1997
- 278 Interpretation
- 279 Administration of, and powers and functions in relation to, the Charges Acts
- 280 Deferred payment of interest charge or realisations charge
- 281 Late payment penalty—interest charge and realisations charge
- 282 Extension of time for payment—interest charge and realisations charge
- 283 Remission of interest charge, realisations charge and late payment penalty
- 284 Recovery of interest charge, realisations charge and late payment penalty
- 285 Payments by cheque or payment order
- 286 Regulations may deal with other matters
Part XVI—Miscellaneous
- 301 Certain provisions in contracts etc. to be void
- 302 Certain provisions in bills of sale etc. to be void
- 302A Certain provisions in governing rules of superannuation funds and approved deposit funds to be void
- 302AB Certain provisions in RSA’s terms and conditions to be void
- 302B Certain provisions in trust deeds void
- 303 Applications to Court
- 304 Parts of dollar to be disregarded in determining majority in value of creditors etc.
- 304A Indexation
- 305 Payment of expenses by Commonwealth
- 306 Formal defect not to invalidate proceedings
- 306A Protection of Registrars, magistrates etc. in relation to examinations
- 306B Protection in respect of reports
- 307 Proceedings in firm name
- 308 Representation of corporation etc.
- 309 Service of notices etc.
- 311 Stamp duty not payable on trustee’s cheques or receipts
- 313 Audit of accounts and records of the Official Trustee and the Official Receivers
- 315 Regulations
- 316 Legislative instruments determining fees
Schedule 1—Acts repealed
Schedule 2—Insolvency Practice Schedule (Bankruptcy)
- Part 1—Introduction
  - Division 1—Introduction
    - 1 1 Object of this Schedule
    - 1 5 Simplified outline of this Schedule
  - Division 5—Definitions
  - Division 6—Application of this Schedule to Official Trustee
  - 6 1 Schedule generally does not apply to the Official Trustee
- Part 2—Registering and disciplining practitioners
- Division 10—Introduction
  - 10 1 Simplified outline of this Part
  - 10 5 Working cooperatively with ASIC
- Division 15—Register of trustees
  - 15 1 Register of Trustees
- Division 20—Registering trustees
  - Subdivision A—Introduction
    - 20 1 Simplified outline of this Division
  - Subdivision B—Registration
  - Subdivision C—Varying etc. conditions of registration
  - Subdivision D—Renewal
    - 20 70 Application for renewal
    - 20 75 Renewal
  - Subdivision E—Offences relating to registration
    - 20 80 False representation that a person is a registered trustee
- Division 25—Insurance
  - 25 1 Registered trustees to maintain insurance
- Division 30—Annual trustee returns
  - 30 1 Annual trustee returns
- Division 35—Notice requirements
  - 35 1 Notice of significant events
  - 35 5 Notice of other events
- Division 40—Disciplinary and other action
  - Subdivision A—Introduction
    - 40 1 Simplified outline of this Division
  - Subdivision B—Direction to comply
  - Subdivision C—Automatic cancellation
    - 40 20 Automatic cancellation
  - Subdivision D—Inspector General may suspend or cancel registration
  - Subdivision E—Disciplinary action by committee
  - Subdivision F—Lifting or shortening suspension
  - Subdivision G—Action initiated by industry body
- Division 45—Court oversight of registered trustees
  - 45 1 Court may make orders in relation to registered trustees
  - 45 5 Court may make orders about costs
- Division 50—Committees under this Part
  - 50 1 Simplified outline of this Division
  - 50 5 Prescribed body appointing a person to a committee
  - 50 10 Minister appointing a person to a committee
  - 50 15 Single committee may consider more than one matter
  - 50 20 Ongoing consideration of matters by committee
  - 50 25 Procedure and other rules relating to committees
  - 50 30 Remuneration of committee members
  - 50 35 Committee must only use information etc. for purposes for which disclosed
- Part 3—General rules relating to estate administrations
- Division 55—Introduction
  - 55 1 Simplified outline of this Part
- Division 60—Remuneration and other benefits received by the trustee
  - Subdivision A—Introduction
    - 60 1 Simplified outline of this Division
  - Subdivision B—Remuneration of trustees
  - Subdivision E—Duties of trustees relating to remuneration and benefits etc.
- Division 65—Funds handling
  - 65 1 Simplified outline of this Division
  - 65 5 Trustee must pay all money into the administration account
  - 65 10 Administration accounts
  - 65 15 Trustee must not pay other money into the administration account
  - 65 20 Consequences for failure to pay money into administration account
  - 65 25 Paying money out of administration account
  - 65 31 Interest on administration account
  - 65 32 Reconciliation of administration account
  - 65 40 Handling securities
  - 65 45 Handling of money and securities—Court directions
  - 65 46 Review of payments to third parties
  - 65 50 Rules in relation to consequences for failure to comply with this Division
- Division 70—Information
  - Subdivision A—Introduction
    - 70 1 Simplified outline of this Division
  - Subdivision B—Annual administration return
    - 70 5 Annual administration return
  - Subdivision C—Record keeping
  - Subdivision D—Giving information etc. to creditors and others
  - Subdivision E—Other requests for information etc.
  - Subdivision F—Reporting to the Inspector General
    - 70 60 Insolvency Practice Rules may provide for reporting to Inspector General
  - Subdivision G—Trustee may be compelled to comply with requests for information etc.
- Division 75—Meetings of creditors
  - 75 1 Simplified outline of this Division
  - 75 2 Division applies to the Official Trustee
  - 75 5 Other obligations to convene meetings not affected
  - 75 10 Trustee may convene meetings
  - 75 15 Trustee must convene meeting in certain circumstances
  - 75 20 Trustee must convene meeting if required by the Inspector General
  - 75 25 Trustee’s representative at meetings
  - 75 30 Inspector General may attend meetings
  - 75 35 Commonwealth may attend certain meetings etc.
  - 75 40 Proposals to creditors without meeting
  - 75 50 Rules relating to meetings
- Division 80—Committees of inspection
  - 80 1 Simplified outline of this Division
  - 80 2 Division applies to the Official Trustee
  - 80 5 Application of sections 80 10 to 80 25
  - 80 10 Committee of inspection
  - 80 15 Appointment and removal of members of committee of inspection by creditors generally
  - 80 20 Appointment of committee member by large creditor
  - 80 25 Appointment of committee member by employees
  - 80 30 Committees of inspection—procedures etc.
  - 80 35 Functions of committee of inspection
  - 80 40 Committee of inspection may request information etc.
  - 80 45 Reporting to committee of inspection
  - 80 50 Committee of inspection may obtain specialist advice or assistance
  - 80 55 Obligations of members of committee of inspection
  - 80 60 Obligations of creditor appointing a member of committee of inspection
  - 80 65 The Inspector General may attend committee meetings
  - 80 70 The Court may inquire into conduct of the committee
- Division 85—Directions by creditors
  - 85 1 Simplified outline of this Division
  - 85 2 Division applies to the Official Trustee
  - 85 5 Trustee to have regard to directions given by creditors
- Division 90—Review of the administration of a regulated debtor’s estate
  - Subdivision A—Introduction
    - 90 1 Simplified outline of this Division
  - Subdivision B—Court powers to inquire and make orders
  - Subdivision C—Review by Inspector General
    - 90 21 Review by Inspector General
    - 90 22 Rules about reviews
  - Subdivision D—Removal by creditors
    - 90 30 Subdivision applies to the Official Trustee
    - 90 35 Removal by creditors
- Part 4—Other matters
- Division 95—Introduction
  - 95 1 Simplified outline of this Part
- Division 96—Administrative review
  - 96 1 Review by the Administrative Appeals Tribunal
- Division 100—Other matters
  - 100 1 Division applies to the Official Trustee
  - 100 5 Trustee may assign right to sue under this Act
- Division 105—The Insolvency Practice Rules
  - 105 1 The Insolvency Practice Rules
- Endnotes
- Endnote 1—About the endnotes
- Endnote 2—Abbreviation key
- Endnote 3—Legislation history
- Endnote 4—Amendment history

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Bankruptcy Act 1966

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Bankruptcy Act 1966

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