Media release: Spotlight on Personal Insolvency Practitioners

The Australian Financial Security Authority (AFSA) today released the Personal Insolvency Practitioners Compliance Report 2016–17.

The report outlines the performance of private personal insolvency practitioners and AFSA’s regulatory and enforcement activities.

Mr Hamish McCormick, Chief Executive and Inspector-General in Bankruptcy, said, ‘AFSA is committed to maintaining public confidence in Australia’s personal insolvency system.  The Personal Insolvency Practitioners Compliance Report provides transparency into that system and the work that AFSA performs.

‘Delivering accessible, accurate and consistent information works to empower clients and stakeholders in making informed decisions. This is a key goal outlined in AFSA’s Corporate Plan.’

Some of the key features and outcomes noted in the report include: 

  • a trend of a relatively low level of justified complaints about personal insolvency practitioners. Of the 176 complaints received in 2016-17, 16 were found to be justified 
  • AFSA reviewed 444 Personal Insolvency Agreements and composition proposals - attending 48 creditors meetings and intervening in 21 instances
  • AFSA finalised 257 requests for Inspector-General reviews under the Bankruptcy Act.

This year, AFSA surveyed creditors, bankrupts and debtors with a debt agreement, to better understand their experience of the personal insolvency system.

‘One of the things we learnt from the survey results is that having information available is not, by itself, enough to influence behaviour,’ Mr McCormick said.

‘We need to ensure that the right information is available at the right time and in the right form throughout the decision making process, for those who are considering informal and formal debt management options.’

‘Having confidence in the personal insolvency system is critical for people who are struggling with debt—as it is for those who are owed money, for practitioners and for AFSA.

‘AFSA will continue to work closely with the Australian Restructuring and Insolvency Turnaround Association (ARITA), the Personal Insolvency Professionals Association (PIPA), creditors, financial counsellors and the Australian Securities and Investments Commission (ASIC) to improve compliance and maintain confidence in the personal insolvency system,’ said Mr McCormick.

The Personal Insolvency Practitioners Compliance Report (PIPCR) 2016-17 complements practitioner related data in AFSA’s Annual Report.