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Professor Tyler said: "The recommendations made in the report were based mainly on provisions of the UK Insolvency Act 1986 and the Australian Bankruptcy Act 1966. We have sought to adapt the changes made to bankruptcy law in other jurisdictions to the best advantage of Hong Kong."

The major recommendations of the Commission are:

Receiving and adjudication orders should be abolished in favour of a single bankruptcy order which could be based on a demand not supported by a judgment of the court, as is required at present. This would considerably reduce the time and expense of taking bankruptcy proceedings;

A new procedure should be introduced to make it easier for debtors to come to an arrangement with creditors for repayment of debts without being made bankrupt. This procedure would involve the court imposing a ban on court proceedings against a debtor while an arrangement was being prepared. Time limits would be imposed and the arrangement would be prepared by a qualified person. Creditors would vote on whether to accept or reject the offer;

Bankrupts should be automatically discharged from bankruptcy after three years. At present, only about one per cent of bankrupts are discharged. Discharge would be subject, however, to objection being made to discharge if the bankrupt fails, for example, to co-operate with the trustee. It would also be possible for bankrupts to seek early discharge. People who become bankrupt for a second time would, however, be expected to remain bankrupt for eight years.

The report will be submitted to the Financial Services Branch for consideration and necessary follow-up action.

Copies of the report, priced at $86, will be on sale at the Government Publications Centre, Queensway Government Offices, from today.

End/Thursday, May 25, 1995