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Thursday, March 10, 2005
Senate passes bankruptcy and family law reforms
New legislation passed on 9 March will make it harder to use family law to avoid paying creditors and easier for people to have bankruptcy and family law cases resolved at the same time, Attorney-General Philip Ruddock has announced.
The Senate passed the Bankruptcy and Family Law Legislation Amendment Bill 2005, which will harmonise the bankruptcy and family law regimes, enabling the Family Court to deal with both matters concurrently.
It also formally recognises, for the purposes of bankruptcy proceedings, the non-financial contribution made by spouses to a relationship.
"It means post-separation, former spouses will be able to line up alongside other creditors in the division of assets to be recognised for the contribution they may have made to running a household and raising a family," the Attorney-General said.
The Bill implements key recommendations of the Joint Taskforce Report on the Use of Bankruptcy and Family Law Schemes to Avoid Payment of Tax.
An additional mechanism will also be available to trustees in the form of a supervised account regime which gives trustees access to all of the bankrupt's income sources before it reaches the bankrupt.