Document ID: chunk:federal_register_of_legislation:C2004A00853:clause:2_106ya:p1
Version: federal_register_of_legislation:C2004A00853
Segment Type: clause
Provision Reference: sch 2 cl 106YA (pt 1/3)
Character Range: 3957–6665

106YA  Effect of bankruptcy

 (1) This section applies in relation to a bankruptcy if:
 (a) before the bankrupt's bankruptcy date, the bankrupt incurred:
 (i) an accumulated HEC debt; or
 (ii) a semester debt or semester debts; or
 (iii) both; and
 (b) that debt or those debts had not been discharged before the bankruptcy date.

Debts related to pre‑bankruptcy period are provable

 (2) Subject to subsection (5), the following are taken to be provable debts for the purposes of the Bankruptcy Act:
 (a) the pre‑bankruptcy part of the bankrupt's accumulated HEC debt;
 (b) the unpaid part of the semester debt, or of each of the semester debts.

Note 1: An accumulated HEC debt and a semester debt can be discharged and replaced by a new accumulated HEC debt through the operation of sections 106N and 106O.

Note 2: If an accumulated HEC debt, or a semester debt that the bankrupt incurred before the bankrupt's bankruptcy date, is discharged and replaced in this way:

(a) it ceases to be a provable debt; and

(b) subsections (6) and (7) of this section can apply to the new accumulated HEC debt; and

(c) for that purpose, a pre‑bankruptcy part for the bankrupt's new accumulated HEC debt is calculated under subsections (8) and (9).

Debts related to post‑bankruptcy period not provable

 (3) To avoid doubt, the following are taken not to be provable debts for the purposes of the Bankruptcy Act:
 (a) the bankrupt's accumulated HEC debt (apart from the pre‑bankruptcy part of that debt);
 (b) any semester debt incurred by the bankrupt on or after the bankrupt's bankruptcy date.

Dividend taken to be voluntary payment

 (4) A dividend paid under the Bankruptcy Act to the Commonwealth in respect of:
 (a) the pre‑bankruptcy part of the bankrupt's accumulated HEC debt; or
 (b) a semester debt mentioned in subsection (1);
is taken for the purposes of this Part to be money that the bankrupt has directed to be applied in payment of that debt.

No release on discharge from bankruptcy

 (5) Section 153 of the Bankruptcy Act does not operate to release the bankrupt from the following:
 (a) all or any part of the accumulated HEC debt;
 (b) a semester debt mentioned in subsection (1).

Replacement of accumulated HEC debt

 (6) If:
 (a) subsections (2) to (5) apply to an accumulated HEC debt (the old HEC debt) of the bankrupt (including because of a previous application of this subsection or subsection (7)); and
 (b) the old HEC debt is discharged under section 106O because the bankrupt incurred another accumulated HEC debt (the replacement HEC debt) under section 106N;
then:
 (c) after the replacement HEC debt is incurred, those subsections apply (subject to any later application of