BANKRUPTCY ACT 1966

PART IV - PROCEEDINGS IN CONNEXION WITH BANKRUPTCY  

Division 4 - Effect of bankruptcy on property and proceedings  

SECTION 58   VESTING OF PROPERTY UPON BANKRUPTCY - GENERAL RULE  

58(1)   [Property affected]  

Subject to this Act, where a debtor becomes a bankrupt:


(a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A , in that registered trustee; and


(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.

Note 1:

This subsection has a limited application if there are orders in force under the proceeds of crime law: see section 58A.

Note 2:

Even if property has vested under this section, it may, under the Proceeds of Crime Act 2002 :

  • (a) become subject to a restraining order; and
  • (b) be taken into account in making a pecuniary penalty order; and
  • (c) become subject to a charge to secure the payment of an amount under a pecuniary penalty order, if it is subject to a restraining order; and
  • (d) be dealt with by the Official Trustee, if it is subject to a restraining order and a court has directed the Official Trustee to pay the Commonwealth an amount under a pecuniary penalty order out of property subject to the restraining order.
  • 58(2)   [Where law requires transmission]  

    Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.

    58(3)   [Enforcement of remedies by creditors]  

    Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:


    (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or


    (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

    58(4)   [No distress for rent against bankrupt]  

    After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.

    58(5)   [Rights of secured creditors]  

    Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.

    58(5A)   [Maintenance agreement; pecuniary penalty order]  

    Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against a bankrupt, or against any property of a bankrupt that is not vested in the trustee of the bankrupt, in respect of any liability of the bankrupt under:


    (a) a maintenance agreement; or


    (b) a maintenance order;

    whether entered into or made, as the case may be, before or after the commencement of this subsection.

    58(6)   [Interpretation of after-acquired property ]  

    In this section, after-acquired property , in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.


     

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