Document ID: chunk:federal_register_of_legislation:C2004C01257:clause:2_1:p13
Version: federal_register_of_legislation:C2004C01257
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 13/20)
Character Range: 40000–42533

the assets of the debtor would be available for the purpose of the discharge of the debt (other than assets that are security for other debts of the debtor or any other entity);
 (d) whether the debtor and creditor are dealing at *arm's length in relation to the debt.

 (4) A *notional loan under a *hire purchase agreement is also a limited recourse debt.

Note: Notional loans arise under Division 240.

 (5) However, an obligation that is covered by subsection (1) is not a limited recourse debt if the creditor's recourse is not in practice limited due to the creditor's rights in respect of a mortgage or other security over property of the debtor (other than the financed property) the value of which exceeds, or is likely to exceed, the amount of the debt.

 (6) Also, an obligation that is covered by subsection (1), (2) or (3) is not a limited recourse debt if, having regard to all relevant circumstances, it would be unreasonable for the obligation to be treated as limited recourse debt.

 (7) A *limited recourse debt is a non‑arm's length limited recourse debt if the debtor and creditor do not deal with each other at arm's length in relation to the debt.

243‑25  When is a debt arrangement terminated?

 (1) A debt arrangement is taken to have terminated if:
 (a) it is actually terminated; or
 (b) the debtor's obligation to repay the debt is waived, novated or otherwise varied so as to reduce, transfer or extinguish the debt; or
 (c) an agreement is entered into to waive, novate or otherwise vary the debtor's obligation to repay the debt so as to reduce, transfer or extinguish the debt; or
 (d) the creditor ceases to have an entitlement to recover the debt from the debtor (other than as a result of an arm's length assignment of some or all of the creditor's rights under the debt arrangement); or
 (e) the debtor ceases to be the owner or the *quasi‑owner of some or all of the *debt property because that property is surrendered to the creditor because of the debtor's failure to pay the whole or a part of the debt; or
 (f) the debtor ceases to be the owner of a beneficial interest in some or all of the debt property because the interest is surrendered to the creditor because of the debtor's failure to pay the whole or a part of the debt; or
 (g) the debt becomes a bad debt.

 (2) However, a debt arrangement that is a *notional loan is not taken to have terminated merely because it has been renewed or extended.

Note: Notional loans arise under Division 240. Under that Division, they are taken