THE LAWS OF BANKRUPTCY

New Zealand Herald, Volume XLVIII, Issue 14809, 12 October 1911, Page 9

THE LAWS OF BANKRUPTCY

OFFICIAL ASSIGNEE EXPLAINS A lecture on "Bankruptcy" was given last night by Mr. W. S. Fisher, the official assignee, before . the Auckland District Accountant Students' Association. There was a large attendance. Mr. Fisher dealt very fully with the details of legal procedure in connection with bankruptcy proceedings, calculated to guide accountants, who are often called upon to assist in such cases.

The law of bankruptcy, he explained, was based upon the summary seizure of all the debtor's property, the distribution of it among his creditors, and his dis,charge from further liability for" the then existing debts. The distribution was the principle needing most attention, for there was always & preliminary rush to get in first when a person's insolvency was rumoured; and - this often led to. transactions the validity of which was anxiously (Questioned when the . crash came. It jjvoald be . a help to remember that the policy of the Bankruptcy Act was opposed to every transaction by a debtor with his property tending to prevent- an equal distribution of it; among his creditors. ' Mr. Fisher , gave a sketch of the history of bankruptcy law, which was essentially a product of civilised times. He dealt in considerable detail with the application of the Act, and with the actual nature of bankruptcy. - Nothing was bankruptcy unless it came within the definition )f some act or acts of bankruptcy as set >ut in tie statute. Shortly put, to secure he commission of an • act of bankruptcy

by the debtor the creditor, after having obtained judgment, has him served with a notice to pay the amount of the judgment within a given time, or to satisfy the Court - that nothing is owing.; ' Non-com- | pliance was by far the most common foun- : dation of bankruptcy proceedings. Once established, the act could not be cancelled by payment of the debt. Speaking; upon the custom of reporting meetings of creditors, Mr. Fisher said that there was nothing in the' Bankruptcy Act which expressly or impliedly gave anyone but creditors a right to be present. In his opinion this was one great blot upon the present procedure, and the factor which had proved more" potent than anything else to destroy bankruptcy business; Not only the bankrupt, but the creditors also, detested the publicity, and great efforts - were 1 always. made to keep. estates out of Court if possible. If publicity helped to lessen losses through insolvency it would be a good thing, but under the present, system it did nothing of the kind. Mr. Fisher then explained in detail the procedure to . be followed in typical forms of bankruptcy, and the powers of the assignee. The present Act, he said, had been described as Draconian in its severity, I for it enumerated no less than 24 offences on any of which the bankrupt was liable to two years* imprisonment. But the penal sections were seldom brought into operation, and hitherto, almost all prosecutions had been for failure to keep proper books of account, and even then hadmostly been instituted because of strong suspicions of fraud. : In most prosecutions under the Act, owing probably to the fact that the jurors knew that they might soon be- in the same box, it was very difficult to secure convictions, and any _ loophole would be taken advantage of to justify an acquittal/ Referring to discharges, he said that • notwithstanding the disadvan- ; tages under which an undischarged bank- j rupt suffered, very few people troubled to ; apply for them. The machinery concern- , ing the discharge of bankrupts called j urgently for reform. ' , iAt the . conclusion of the address a learty vote of thanks was accorded to the ecturer. = : / ' •