The 188 Authority initiates the process for a Personal Insolvency Agreement. A 188 Authority is irrevocable and upon signing a 188 authority, you commit an act of bankruptcy, which means if your proposal fails it will assist your creditors in petitioning for your bankruptcy (ie your creditors will not need to reply upon any other act of bankruptcy if they petition for your bankruptcy). For that reason is important that you put forward your best possible proposal.
Once you sign a 188 authority, your Controlling Trustee will have full control over your property. This control will continue until one of the following events occur:
- the creditors resolve that the property is no longer subject to the control of the Controlling Trustee; or
- a Personal Insolvency Agreement is executed by the debtor following the resolution of creditors, at which time the control is transferred to the trustee who will supervise the Personal Insolvency Agreement; or
- a period of four (4) months has elapsed from the time of the authority being accepted; or
- the Court releases the debtor’s property; or
- the debtor becomes a bankrupt or dies.
Your Controlling Trustee will have power to deal with your property and will have the ability to:
- take immediate control of your property;
- make such enquiries and investigations in connection your affairs;
- carry on your business (if you a sole trader or in partnership); and
- deal with your property in way that will, in the opinion of your Controlling Trustee, be in the interests of creditors.
In addition, the Controlling Trustee will be required to:
- notify your creditors that a s188 authority has been signed;
- give information about the administration of your estate to any creditor who reasonably requests it;
- ensure that you discharge your duties under the Bankruptcy Act; and
give consideration to any offences you may have committed under the Bankruptcy Act and refer any offences to ITSA’s Bankruptcy Fraud area for prosecution.
