FARM BUDGETS

Manawatu Standard, Volume LV, Issue 89, 13 March 1935, Page 6

FARM BUDGETS

PROTECTION FROM FORECLOSURE. . HOW NEW SCHEME WILL WORK. (By Telegraph.—Special to Standard.) ■ - WELLINGTON, March 12. What happens to the mortgagorfanner who, under the provision of a stay order, is protected from any bankruptcy or foreclosure proceedings but is required to conduct Ins farm undei the budgetary system for five years Twelve lengthy clauses in the Rural Mortgagors Final Adjustment Bill detail tTiese central provisions of rehabih tation which, in the opinion ot the minister in charge, are only second in importance to the machinery laeihtat jug voluntary arrangements between a mortgagor and his creditors. . A protective stay order is not issued if the Adjustment Commission considers the mortgagor’s financial position enables him to carry on farming operations without it, or if it considers the mortgagor, by reason of the manner in which his farming has been conducted, is not deserving cf further protection. Once a stay order is issued, payments of interest and principal or other moneys may be suspended for twelve months though the creditors affected bv this provision have the right of appeal to the Court of Review. Farm revenue is to be handled by a trustee appointed by the Adjustment Commission unless it considers the mortgagor suitable to perform these duties as agent for the creditors. The trustee will keep a separate bank account and proper books, submitting six-monthly statements to the Commisison, and he will be paid from the funds of the estate. If the majority (in value) of the,creditors desire the appointment of a supervisor the Adjustment Commission may, in its discretion, employ such an official who, according to the Bill “shall act in an advisory capacity to the mortgagor in tlie conduct of his farming operations.” If the mortgagor refuses to act in accordance with his advice, the Adjustment Commission will report to the Court of Review, which may discharge the protective order. The supervisor is to he paid from the proceeds of the farming-operations. ALLOWANCE FOR EXPENSES. The first development on the issue of a stay order is, that the trustee, in conjunction with the supervisor and the Adjustment Commission, will prepare a budget for the year, showing the estimated income of the mortgagor from the farming operations and the estimated, disbursements. This will lie submitted to the mortgagor, who will be given the opportunity to make representations with respect to the amount proposed to be allowed him in respect of iiving expenses and working expenses. The Adjustment Commission, in giving directions for the distribution, of the income, will, states clause 46 of the Bill, have regard to the following rules: (a) Provision should be made for reasonable living expenses for the mortgagor and his family and for adequate working expenses before any payment is made in respect of rates, taxes, rent or , other statutory charges on the farm lands of the mortgagor. (b) Before any payment of interest is made to the mortgagees of the land or chattels, provision should be made for the payment of rates and taxes or rent on any land used by the mortgagor for agricultural purposes, and in so far as they have priority over the mortgages or other statutory charges on the farm lands of the mortgagor. (c) As between the mortgagees, provision should be made for -the payment to them of interest in respect of the budgetary period in the order of their respective priorities. Mortgagees have the right of appeal to the Court of Review in respect of the priority of decisions. The protection afforded the mortgagor during the stay order period also restricts the rights of a vendor under the customary hire purchase agreement if the Adjustment Commission is of the opinion that the chattel concerned is required for farming operations. The Commission will fix the amount which the vendor shall receive during the currency of the restriction. If the trustee receives on account of the mortgagor any capital assets which are not connected with his farming operations, the Court mjiy order the realisation and distribution of the receipts to the creditors in a manner which it will direct.