Significance

• The act regulates all areas of bankruptcy, both for the bankrupt individual and for his creditors. To ensure that these procedures are followed, it establishes an inspector-general of bankruptcy and also clarifies that bankruptcy proceedings are conducted through the Federal Court and the Federal Magistrates Court.
  
  

Function

• The act also establishes a Common Investment Fund. The official trustee (an individual or entity who guarantees the bankrupted individual) must pay out of this fund when paying on behalf of a bankrupt individual. The money collected in the Common Investment Fund is determined by the court. It is paid as established by a debt agreement or personal insolvency agreement.
  
  

Features

• The act regulates several other issues, such as establishing that the bankrupt individual must reveal all capital and sources of income, including those not in Australia. Additionally, creditors must prove in court that the bankrupt individual owes them a certain amount, and they must present this amount in an official debtor's petition.