Insolvency Amendment Act 2009

1: Title
This Act is the Insolvency Amendment Act 2009.
2: Commencement
1: Section 10 10 March 2009
2: The rest of this Act comes into force on the day after the date on which it receives the Royal assent.
3: Principal Act amended
This Act amends the Insolvency Act 2006 2009-11-17 Insolvency Act 2006 Note that section 10 is deemed to have come into force on 10 March 2009 (see s 2(1)).
1: Amendments to Insolvency Act 2006
Insolvent gifts
4: New sections 204 and 205 substituted
Sections 204 205
204: Insolvent gift within 2 years may be cancelled
A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if the bankrupt made the gift within 2 years immediately before adjudication.
205: Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts
1: A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if—
a: the bankrupt made the gift within the period beginning 2 years immediately before adjudication and ending 5 years immediately before adjudication; and
b: the bankrupt was unable to pay his or her debts.
2: A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)(b)
5: Limits on recovery
Section 208
b: a reasonable person in A's position would not have suspected, and A did not have reasonable grounds for suspecting, that,—
i: in the case of an insolvent gift, the bankrupt was, or would become, unable to pay his or her debts without the aid of the property that the gift is composed of; or
ii: in the case of any other irregular transaction referred to in section 206(1), the bankrupt was, or would become, unable to pay his or her due debts; and .
6: When Assignee may recover difference
Section 212(b) No asset procedure
7: Criteria for entry to no asset procedure
Section 363(2) , but does include any assets (for example, gifted assets) that might be recoverable by the Assignee if the debtor were adjudicated bankrupt on the date of application for entry to the no asset procedure and if the irregular transaction provisions in subpart 7 of Part 3 applied
8: Effect of termination
Section 375 , and the debtor is liable to pay any penalties and interest that may have accrued
9: Discharge
1: Section 377 Time of discharge
2: Section 377
2: However, a debtor is not automatically discharged if the Assignee—
a: is satisfied that the 12-month period should be extended for the purpose of properly considering whether the debtor's participation in the no asset procedure should be terminated; and
b: sends a written deferral notice to the debtor's last known address before the expiry of the 12-month period.
3: The deferral notice must state an alternative date for automatic discharge, which must be no later than 25 working days after the expiry of the 12-month period.
4: The deferral notice is effective whether or not the debtor receives it.
5: The Assignee must, as soon as practicable, send a written notice of the deferral to each creditor of the debtor known to the Assignee.
6: The debtor is automatically discharged from the no asset procedure on the date stated in the deferral notice.
7: The Assignee may revoke a deferral notice in the same way in which it was sent, in which case, the debtor is automatically discharged from the no asset procedure on—
a: the expiry of the 12-month period in subsection (1), if the notice is revoked before that date; or
b: in other cases, the date of revocation.
10: New section 377A inserted
1: Section 377
2: The following section is inserted after section 377
377A: Effect of discharge
1: On discharge under section 377, the debtor's debts that became unenforceable on the debtor's entry to the no asset procedure are cancelled, and the debtor is not liable to pay any part of the debts, including any penalties and interest that may have accrued.
2: However, subsection (1)
a: any debt or liability incurred by fraud or fraudulent breach of trust to which the debtor was a party:
b: any debt or liability for which the debtor has obtained forbearance through fraud to which the debtor was a party.
3: The debts and liabilities referred to in subsection (2)
11: New section 377B inserted
The following section is inserted after section 377A
377B: Discharge does not release partners and others
A discharge under section 377 does not release any person who, at the date of discharge, was—
a: a business partner of the discharged debtor; or
b: a co-trustee with the discharged debtor; or
c: jointly bound or had made any contract with the discharged debtor; or
d: a guarantor or in the nature of a guarantor of the discharged debtor. Public registers
12: Purposes of public registers
Section 448(3)(a) and persons discharged from that procedure under section 377
13: General information that must be held in public registers
1: Section 449(1) The public registers must contain the following information in respect of a person ( P The public registers must contain the following information in respect of a person ( P
2: Section 449(1)(b) or has been discharged from the no asset procedure under section 377, is currently admitted to the no asset procedure,
3: Section 449(1)
ha: if P is discharged from the no asset procedure under section 377, the date when P was so discharged: .
4: Section 449(3) , and the bankruptcy that was so annulled does not count for the purposes of section 449A
5: Section 449
4A: All information relating to a person who has been admitted to the no asset procedure must be removed from the public register maintained under section 368—
a: 4 years after the date of discharge under section 377; or
b: as soon as practicable after a termination under section 372(a), (c), or (d).
6: Section 368(1) and persons discharged from that procedure under section 377
14: New section 449A inserted
The following section is inserted after section 449
449A: Information kept indefinitely on public register after multiple insolvency events
1: This section applies in the case of a person who—
a: is or has been bankrupt on 2 or more occasions; or
b: is or has been both bankrupt and discharged from the no asset procedure under section 377.
2: Information about the person must not be removed from the public register under this Act and, in particular, section 449(4), (4A)
3: The Assignee must ensure that the public register contains all of the information required by this Act about the person and each insolvency event.
4: Bankruptcies under the Insolvency Act 1967 count for the purposes of subsections (1) and (3)
15: Search criteria
1: Section 453(2)
da: is discharged from the no asset procedure under section 377; or .
2: Section 453(2) ; or
h: is subject to section 449A
16: Search purposes
1: Section 454(b) or is currently admitted to the no asset procedure is currently admitted to the no asset procedure, or is discharged from that procedure under section 377
2: Section 454
e: by any person for the purpose of ascertaining whether section 449A
2: Transitional provisions and amendment to Privacy Act 1993
Insolvent gifts
17: Amendments relating to insolvent gifts apply only to bankruptcies commenced after Act comes into force
The principal Act sections 4 to 6 Which debts are cancelled on discharge from no asset procedure
18: Amendments relating to cancellation of fraudulent debts under no asset procedure
1: Any debt that is cancelled under section 377(2) section 377A of the principal Act by section 10 section 377A(2)
2: In particular, the debtor is liable to repay any part of the debt, including any penalties and interest that may have accrued during the period when the debt was cancelled.
3: Subsection (2) does not limit subsection (1).
4: Any proceedings for enforcement of the debt may be commenced or continued after the enactment of section 377A as if the debt had never been cancelled. Public registers
19: Amendments relating to 4-year period for public registers apply to all debtors admitted to no asset procedure after Act comes into force
The principal Act sections 12 13 15 16
20: Amendments relating to retention of records if multiple insolvency events
1: Section 449A section 14 section 449A(1)
2: As soon as practicable after this section comes into force, the Assignee must ensure that the public register contains all of the information required by the principal Act (as amended by this Act) about any person to whom section 449A
3: To avoid doubt, the requirement in subsection (2) includes a requirement to ensure that the public register contains information about bankruptcies under the Insolvency Act 1967 section 449A Amendment to Privacy Act 1993
21: Schedule 2 of Privacy Act 1993 amended
1: This section amends the Privacy Act 1993
2: The item relating to the Insolvency Act 2006 in Part 1 354, 62, 2009-11-17 Privacy Act 1993