May Prepare Proposals

Press, Volume CIV, Issue 30899, 4 November 1965, Page 12

May Prepare Proposals

(New Zealand Preet Atsoceation)

WELLINGTON, November 2.

Insolvent persons may be able to avoid bankruptcy procedures under a new scheme enabling them to prepare official proposals for paying or satisfying debts.

The scheme, outlined in the Insolvency Bill, would allow insolvents to offer to assign all or any property to a trustee, for the benefit of his creditors, to pay debts by instalment or at some time in the future, to compromise debts at less than 20s in the pound, or any other arrangement to satisfy debts.

Any such proposal would have to be filed with the nearest official assignee, who would investigate the affairs and property of the insolvent and call a meeting of creditors.

On meeting, creditors could examine the insolvent, accept the proposal by resolution, confirm any trustee nominated by the insolvent, or appoint some other person as trustee. The bill provides then for court approval of the proposal and its embodiment in a deed. Where a proposal had secured court approval, bankruptcy proceedings against the insolvent would be forbidden. No other proceedings would be allowed except with the leave of the court.

In specified circumstances —such as failure of the insolvent to execute the deed within a week, failure to carry out or comply with the proposal, injustice or undue delay to creditors generally, or the inclusion of misleading facts in affidavits from the insolvent the court could, on application, cancel the proposal and adjudge the insolvent bankrupt.