BANKRUPTCY ACT 1966

PART X - PERSONAL INSOLVENCY AGREEMENTS  

Division 2 - Meeting of creditors and control of debtor ' s property  

SECTION 205   DUTIES OF SHERIFF AFTER RECEIVING NOTICE OF SIGNING OF AUTHORITY UNDER SECTION 188 ETC.  

205(1)   [Sheriff to refrain from certain action]  

Subject to this section, where notice in writing of the signing by a debtor of an authority under section 188 , of the calling of a meeting of creditors of a debtor in pursuance of this Division or of the passing of a special resolution under section 204 requiring a debtor to execute a personal insolvency agreement or present a debtor ' s petition is given to a sheriff, the sheriff:


(a) shall refrain:


(i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and

(ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and


(b) shall not:


(i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or

(ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due to the debtor.

205(2)   [Notice of maintenance agreement or order]  

Where a notice is given under subsection (1) to a sheriff, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the sheriff a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (1) ceases to apply in relation to the process of execution or attachment, as the case may be.

205(3)   [Payment of moneys]  

Subject to this section, where notice in writing of the signing by a debtor of an authority under section 188 , of the calling of a meeting of creditors of a debtor in pursuance of this Division or of the passing of a special resolution under section 204 requiring a debtor to execute a personal insolvency agreement or present a debtor ' s petition is given to the registrar or other appropriate officer of a court:


(a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or


(b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor;

any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf.

205(4)   [Exception to subsec (3)]  

Where a notice is given under subsection (3) to the registrar or other appropriate officer of any court, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the registrar or other officer a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (3) ceases to apply in relation to the process of execution or the attachment, as the case may be.

205(5)   [Payment of moneys out of court]  

Subsection (1) does not prevent the sheriff from selling property, taking action to attach a debt or paying the proceeds of the sale of property or other moneys to a creditor or a person on his or her behalf, and subsection (3) does not prevent moneys in court from being paid out of court to a creditor or a person on his or her behalf, if:


(a) having received notice of the signing by the debtor of an authority under section 188 , the sheriff, registrar or other officer does not, within 42 days from the date on which the debtor signed the authority, receive notice of the passing of a special resolution under section 204 requiring the debtor to execute a personal insolvency agreement or present a debtor ' s petition;


(b) having received notice that a meeting of creditors of the debtor has been called, the sheriff, registrar or other officer does not, within 7 days from the date for which the meeting was called, receive notice of the passing of a special resolution referred to in paragraph (a) or of the adjournment of the meeting;


(c) having received notice of the adjournment of a meeting of creditors of the debtor, the sheriff, registrar or other officer does not, within 7 days from the date to which the meeting was adjourned, receive notice of the passing of a special resolution referred to in paragraph (a) or of the further adjournment of the meeting; or


(d) having received notice of the passing of a special resolution referred to in paragraph (a), the sheriff, registrar or other officer does not, within 21 days from the date on which the resolution was passed, receive notice that the personal insolvency agreement required to be executed has been duly executed or that the debtor has presented a debtor ' s petition.

205(6)   [Costs of execution]  

Where:


(a) the sheriff, in pursuance of subsection (1) of this section or of subsection 119(1) or (2) , refrains from taking action to sell property of a debtor (being real property), the debtor executes a personal insolvency agreement, and the property vests in the trustee of the agreement; or


(b) a sheriff, in pursuance of subsection (1), refrains from taking action to sell property of a debtor (being real property), the debtor becomes a bankrupt and the property vests in the trustee in the bankruptcy;

the costs of the execution are a first charge on that property.

205(7)   [Sheriff ' s failure to comply]  

A failure by the sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a debtor in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor.




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