Personal insolvency numbers have remained low since the temporary changes to Commonwealth bankruptcy law came into effect in March 2020. However, the results of a recent survey by ARITA indicates that the profession expects a significant rise in insolvencies in late 2020.
With a potential influx of individuals into personal insolvency, now is an important time for practitioners to consider the effectiveness of their communication with debtors and creditors. Typically, the majority of these debtors will be new to the system, with little or no prior knowledge of insolvency. Understandably, it may be a confusing and stressful time for people and they are likely to be vulnerable. All this may impact on a person’s ability to understand the complexities of personal insolvency, and what the trustee or administrator requires of them.
We anticipate that if insolvency numbers increase, so may the enquiries and complaints to practitioners. The number of enquiries and complaints to AFSA may also rise.
We encourage practitioners to take stock sooner rather than later to ensure that their staff and their processes will be ready to meet any increased demand in what could be a rapidly changing environment.
We also encourage practitioners to revisit the relevant Inspector-General’s expectations relating to these issues:
- IGPD 22 – Effective practitioner communication; and
- IGPS 10 - Complaints handling process for complaints against practitioners and debtors.
National Manager – Regulation and Enforcement