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Thursday, 17 June 2004
Page: 24091

Senator TROETH (Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) (1:28 PM) —The Bankruptcy Legislation Amend-ment Bill 2004 and the Bankruptcy (Estate Charges) Amendment Bill 2004 will make important changes to part X of the Bankruptcy Act 1966. Part X arrangements provide a formal alternative to bankruptcy, allowing debtors to come to binding arrangements with creditors for payment or settlement of outstanding debts. The improvements to be made by these bills will increase confidence in part X arrangements and ensure that part X arrangements continue to have an important place in Australia's personal insolvency system.

The reforms generally have three objectives: to increase the disclosure requirements of debtors, creditors and trustees involved in part X arrangements; to simplify the process by replacing the three current types of arrangements with a single form of arrangement to be called a `personal insolvency agreement'; and to provide a simpler and more consistent process for setting aside and terminating part X arrangements. Many of the issues which may undermine the integrity of part X can also arise in relation to post-bankruptcy schemes of arrangement and compositions under division 6 of part IV of the act. Therefore, the bill also includes amendments to those provisions particularly in relation to the disclosure obligations of debtors, creditors and trustees. The bill will also make some minor and technical amendments to improve the operation of the Bankruptcy Act and correct a drafting error in the transitional provisions contained in the Bankruptcy Legislation Amendment Act 2002. I commend the bill to the Senate.

Question agreed to.

Bills read a second time.