Bankruptcy organisations have a new name.
The Insolvency and Trustee Service of Australia has recently changed its name to the Australian Financial Security Authority (AFSA). AFSA is responsible for dealing with bankruptcy matters and personal insolvency, trustee services and the administration of the Personal Property Securities Register (PPSR). The PPSR is the official registry of security interests (which were formerly known as company charges and registered with the Australian Securities and Investments Commission).
Just recently, the Federal Magistrates Court has also changed its name to the Federal Circuit Court of Australia (FCCA). The FCCA (together with the Federal Court) exclusively handles all bankruptcy proceedings.
How do I make someone bankrupt?
A creditor who is owed more than $5,000 can have issued a bankruptcy notice which is served on the debtor. If the debtor fails to pay the amount owed within 21 days then they have committed an act of bankruptcy and proceedings by way of a creditors petition can be issued in the FCCA seeking a sequestration order which makes the debtor bankrupt.
Bankruptcy proceedings can be an effective way of obtaining payment from a Debtor that seeks to avoid you.
How do I secure my interest in assets which are in another person’s possession?
There are several situations where a registrable security interest arises. Some examples include:
- When a party loans another money and secures the repayment of the loan over the borrower’s assets;
- When a party provides goods on credit and the party wants to claim back the goods if the account is not paid;
- When a party is in the business of leasing goods and wants to ensure that it can take back the goods when the lease ends (or the lessee becomes insolvent).
It is important to make sure that any security interest is documented properly and is registered with the AFSA on the PPSR. If registration does not occur, then your interest in the assets, ability to recover the assets or priority in the debtor’s insolvency could be affected adversely.
For more information please contact Phillip Leaman of a member of our Insolvency Team.
