Unclaimed bankruptcy moneys – new law

Easier processes to recover unclaimed moneys in bankruptcy commence at the end of June 2019. The Official Receiver in Bankruptcy will be able to decide upon such claims, in the same way that ASIC has done for some years. See Unclaimed moneys.

A right of review to the Court will be provided.

The law at present, under s 254 Bankruptcy Act, requires a person claiming such moneys to apply to the Court.  That was the case in King v AFSA [2019] FCA 537, where the application was for a sum of $52,286.  While the Federal Court readily made the order, the application filing fee, and the legal costs, would have added up.

7The new law provides that a person may make an application under new s 254 in relation to moneys paid to the Commonwealth on or after or before the commencement of the section, as long as the person had not previously made an application, determined or pending.

AFSA is yet to issue new guidance.

As I have previously explained, the Commonwealth would have a large accumulated sum of such moneys, given that unless the sum unclaimed involved was in the order of some thousands of dollars, a court application and its costs and time would not have been worth it to pursue.  Under the new law, perhaps these claims may start to appear. 

Posted by Michael Murray

Michael is a lawyer and writer on insolvency and reconstruction law and practice, personal insolvency, corporate governance, regulation, government law, and business ethics, among others. He is qualified in law and insolvency, and in criminology and its connected disciplines. Michael is a Fellow of the Australian Academy of Law.