Cap. 13 ст. 519Terms of debt agreement and debtor’s income payment plan.

(1) During the meeting, the bankruptcy trustee shall propose for discussion and approval by the creditors, the terms of a debt agreement, for the settlement of the claims of the creditors, in whole or in part, out of the bankruptcy estate, which terms have been agreed to by the bankrupt.

(2) Where the bankrupt is a natural person, the bankruptcy trustee may propose, within the terms of the debt agreement referred to in sub-article (1), an income payment plan, in terms of which the bankrupt shall be required to continue to contribute a defined amount of money towards the bankruptcy estate in the hands of the bankruptcy trustee, out of anything that devolves on, or is derived by, the bankrupt after the rehabilitation in terms of article 524(1)(b), for a period not exceeding three (3) years to be reckoned from the date of appointment of the bankruptcy trustee, for the further settlement of debts, in whole or in part, in accordance with the terms of the debt agreement.

(3) The bankruptcy trustee shall, in support of the debt agreement, provide such information as shall be necessary to enable the creditors to appropriately evaluate the proposed terms, and in the case of an income payment plan being proposed in terms of sub-article (2), such information shall include a financial projection covering the entire duration of the income payment plan as proposed, illustrating:

(a) the income that the bankrupt may be reasonably expected to generate, on the basis of the bankruptcy trustee’s best assessment, regard being had to the bankrupt’s circumstances, previous experience, and qualifications; and

(b) the expenditure that the bankrupt may be reasonably expected to incur, on the basis of the bankruptcy trustee’s best assessment, regard being had to the bankrupt’s circumstances and dependants.

(4) The bankruptcy trustee shall, during such meeting, organise the creditors into classes, for the purpose of voting on the proposed terms, as the bankruptcy trustee may deem necessary to distinguish between the varying economic interests thereof, and which classes shall, at minimum, distinguish between:

(a) the holders of secured debts;

(b) the holders of unsecured debts;

(c) the holders of subordinated debts, meaning debts that, in the event of the liquidation of the bankruptcy estate, would remain unpaid until the full settlement of all the non-subordinated debts of the bankrupt; and

(d) the holders of any ownership rights, or other similar interests, in the bankrupt.

(5) The creditors may, at the discretion of the bankruptcy trustee, be further divided into additional classes, as may be necessary in order to distinguish between creditors within the same class but having debts pertaining to different legal priorities.

(6) All creditors comprising part of a specific class shall be treated equally for the purposes of the proposed terms, except insofar as with regard to any detrimental treatment that is expressly agreed to by the directly affected creditor or creditors.

(7) Any agreement extraneous to the proposed terms, howsoever formulated, that purports to grant an unfair advantage to a creditor, shall be null and void.