Section 88 — Bankruptcy Act 1966 (Cth)

A payment made by a debtor to a creditor before the debtor became a bankrupt and representing in part principal and in part interest shall, notwithstanding any agreement to the contrary, be deemed, for the purposes of this Act but not otherwise, to have been apportioned in satisfaction of principal and interest in the proportion that the principal bears to the amount payable as interest at the agreed rate.

Related sections

• s 85 — Proof by employees
• s 86 — Mutual credit and set‑off
• s 87 — Deduction of discounts
• s 89 — Apportionment where security realized before or after bankruptcy
• s 90 — Proof of debt by secured creditor
• s 91 — Redemption of security by trustee etc.

Research how courts apply s 88

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