BANKRUPTCY.

Southland Times, Issue 1191, 4 January 1870, Page 3

BANKRUPTCY.

The Grand Jury at Nelson made the following presentment to his Honor Mr Justice Richmond, at the late session : — 3 "The Grand Jury present that the anomalous state of the laws in New 3 Zealand with regard to debtors and 5 creditors is the cause of much evil. They i give little or no protection to the honest i and industrious trader, while they afford r to unprincipled men undue facilities, not t only to contract, but to rid themselves of debt. By the inducement of so easily : clearing off liabilities, many, with ample i means to pay every one, are, in fact, ! tempted to go through the Insolvent i Court, hence, bankruptcies in many i instances, tainted more or less with fraud, . are largely on the increase. The '■ indifference of creditors in cases of \ bankruptcy is, no doubt, the subject of ; just remark; but in the opinion of the i Grand Jury, this very indifference arises | ' from the fact that in the event of ; successful opposition, the punishment awarded by the law to an unprincipled , i bankrupt is so slight and inadequate, as riot to deter others from acting with similar dishonesty. The Grand Jury are '■, of opinion that a marked necessity exists for an alteration which shall empower the I Inspector of Bankruptcy to take pos- • session, pro tempore at least, of the stock- \ in-trade, books, and other effects belonging to bankrupt estates, . immediately on : the notification of insolvency appearing in the Gazette. Under the existing law, the bankrupt is permitted to hold possession for some time after such : notification, a power which experience has proved not to be for the benefit of the estate. That a limit should be fixed to the time within which claims of creditors shall be proved. The present law fixes ■ no term, and the result is uncertainty on the part of the Trustee in declaring a dividend, and great delay in closing the bankruptcy in consequence of contingent claims. That costs in bankruptcy cases are at present excessive, and are greatly out of proportion to the value of estate, and the jury are of opinion that, especially in small estates, such costs should be materially reduced." "We take the following remarks on the same subject from the West Briton (English paper) : — One of the most satisfactory measures of the present session is the Bankruptcy Bill. And in this new Act it will be impossible for a fraudulent debtor to escape punishment He will have to give up everything to his trustees, and he will not receive his discharge until the creditors are fully satisfied that he is nofc keeping anything back. And in the event of a bankrupt failing to obtain his discharge, be will still remain liable to his creditors for the money he owes them. Thus "whitewashing" is rendered impossible until the creditor be either paid or satisfied. There is a very necessary clause in the bill, to prevent swindling by means of marriage settlements. If a man makes a settlement before marriage, it will protect only such property as he has actually paid over to his wife's trustees before bankruptcy. If he makes tL c settlement "after niarriage, it will be void as against his creditors, if he becomes bankrupt within two years after making it ; and it will also be void if be become bankrupt within ten years after the date of the deed, unless it be proved that at the time of making* it, the settler was able to pay all his debts without the aid of the property comprised under the settlement. Thus the bankruptcy law passes from a very loose concern to a very tight concern, leaving no loophole of escape for the fraudulent debtor. In future he will be imprisoned not for indebtedness, but for swindling his creditors.