Spotlight: Compliance and filing of the Statement of Affairs

AFSA recently reviewed completion rates of the compulsory Statement of Affairs forms. The review was encouraging with most people who are bankrupt complying with their obligations, either voluntarily or after contact with the Official Receiver (OR) or AFSA.

Section 77CA of the Bankruptcy Act 1966 gives the OR power to issue a statutory notice to a person who is bankrupt, requiring them to file their statement of affairs. Failing to comply is an offence under section 267B, attracting a penalty of 12 months imprisonment. This power specifically relates to individuals that fail to comply with the provisions of section 54, when they were made bankrupt by a sequestration order and had 14 days to file their Statement of Affairs.  

Since 2015, trustees have made an average of 464 annual applications for the OR to issue a 77CA notice. These applications have been declining each year, from 793 applications in 2015 down to only 325 applications in 2020.

There are approximately 15,000 to 20,000 new bankruptcies each year, including an average of 1,492 bankruptcies through sequestration orders. A review of the data indicates that 77CA applications relate to 24% of matters where an individual has failed to file their statement of affairs after being made bankrupt through a sequestration order.  

Since 2015, AFSA has received more than 100 offence referrals each year that relate to a breach of section 267B.[1] These referral figures have been declining since 2018. The offence referral data indicates a 48% compliance rate against all 267B referrals that were accepted for enforcement investigation with 33% referred for prosecution. Once matters are referred for prosecution, the conviction rate is 90%.

AFSA remains committed to ensuring the compliance process is simple to help people comply. We hope to see increased compliance as a result of the introduction of the online bankruptcy application process.

Trustees can apply for Official Receiver Notices via AFSA Online Services. Further information about the Official Receiver’s powers can be found in Official Receiver Practice Statement 7.

 

[1] This section relates to non-compliance with either sections 6A(3), 77C(1), 77CA or 139V of the Act.