Implications of signing a 188 Authority

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 debtors 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 AFSA’s Bankruptcy Fraud area for prosecution.

Tagged →