THE Insolvency Law Reform Act (ILRA)
On 1 March 2017, the first portion of the Insolvency Law Reform Act 2016 (Cth) (ILRA) commenced to bring sweeping changes to the way in which bankruptcies are dealt with in Australia. The second portion of changes will come into effect on 1 September 2017.
The reforms stretched across the Bankruptcy Act 1966 (Cth), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The Australian Financial and Security Authority said that the changes will aim to:
- Remove unnecessary costs and increase efficiency in insolvency administrations;
- Align the registration and disciplinary frameworks that apply to registered liquidators and registered trustees;
- Align a range of specific rules relating to the handling of personal bankruptcies and corporate external administrations;
- Enhance communication and transparency between stakeholders;
- Promote market competition on price and quality;
- Improve the powers available to the corporate regulator to regulate the corporate insolvency market and the ability for both regulators to communicate in relation to insolvency practitioners operating in both the personal and corporate insolvency markets; and
- Improve overall confidence in the professionalism and competence of insolvency practitioners.
The complexity of these changes are realised in the practical application of the law. The administration of a bankrupt estate has been changed, along with a number of changes in the way the Trustee acts in their capacity as the administrator of the bankrupt estate.
In addition to the significant changes to the legislation and accompanying rules, most of the Court forms, and forms used by AFSA have changed: enhancing the complication of the new regime.
WHAT DOES THIS MEAN FOR YOUR FAMILY LAW DISPUTE?
Bankruptcy and family law have always been “cousins-twice-removed”. The conflict of laws was well-known, and it is almost certain that the changes to the way in which bankruptcies are administrated will have flow-on effects to the settlement of a family law matter when one or both parties have some involvement with bankruptcy.
If you are about to become bankrupt, are bankrupt, and engaged in a family law dispute, we highly recommend that you contact our office directly to make an appointment to discuss your matter.