BANKRUPTCY ACT 1966

PART VI - ADMINISTRATION OF PROPERTY  

Division 3 - Property available for payment of debts  

Subdivision A - General  

SECTION 115   COMMENCEMENT OF BANKRUPTCY  

115(1)   [Creditor ' s petition]  

If a person becomes a bankrupt on a creditor ' s petition and subsection (1A) does not apply, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the creditor ' s petition was presented.

115(1A)   [Application for extension deemed frivolous etc]  

If:


(a) a person becomes a bankrupt on a creditor ' s petition that was based on breach of a bankruptcy notice; and


(b) the time for compliance with the notice was extended under subsection 41(7) ; and


(c) the Court making the sequestration order considers that the application under subsection 41(7) was frivolous, vexatious or otherwise without substantial merit;

then the bankruptcy is taken to have relation back to, and to have commenced at, the time that would have applied under subsection (1) of this section if the time for compliance had not been extended.

115(1B)   [Sequestration orders]  

If a person becomes a bankrupt because of a sequestration order made under Division 6 of Part IV or under Part X , then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the application for the sequestration order was made.

115(2)   [On debtor ' s petition]  

The bankruptcy of a person who becomes a bankrupt as a result of the acceptance of a debtor ' s petition is taken to have relation back to, and to have commenced at, the time indicated in the following table.


Debtor ' s petition bankruptcy - time to which bankruptcy has relation back and time bankruptcy commences
Circumstances in which debtor ' s petition was presented or accepted Time to which bankruptcy has relation back and time of commencement of bankruptcy
1 Petition accepted by the Official Receiver under a direction of the Court Time specified by the Court as the commencement of the bankruptcy
2 Petition presented when at least one creditor ' s petition was pending against the petitioning debtor (whether alone, as a member of a partnership or as a joint debtor), and accepted by the Official Receiver without a direction from the Court Time of the commission of the earliest act of bankruptcy on which any of the creditor ' s petitions was based
3 Petition presented when no creditor ' s petitions were pending but the debtor had committed at least one act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court Time of commission of the earliest act of bankruptcy within the 6 months before the petition was presented
4 Petition presented when no creditor ' s petitions were pending and the debtor had not committed any act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court Time of presentation of the petition

115(3)   [Effect of prior act of bankruptcy]  

A creditor ' s petition or a sequestration order made on a creditor ' s petition is not invalid by reason of the commission of an act of bankruptcy before the time when the debt on which the petition was based was incurred.




This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.