AFSA has changed the way we distribute bankrupt estates to registered trustees (RTs) working in the private sector.
Our main priority as the Official Trustee (OT) is to focus on matters that are in the public interest and build confidence in the personal insolvency system – even if the administration may not result in a financial return to creditors or cover our administration costs. Other estates will be offered to RTs to administer.
When the new system for distributing bankrupt estates to RTs was introduced, changes were made to the Bankruptcy Form. This included asking those applying for bankruptcy to opt-out if they do not want their estate managed by an RT. The new form went live at the end of July as part of a trial and since the launch we have had feedback that the opt-out option causes unnecessary confusion. It also created the false perception that the OT must retain a matter indefinitely if an applicant opts out. We sought legal advice and have decided to remove the opt-out provision from the form. This more closely aligns with the intent of the Bankruptcy Act 1966 and the Bankruptcy Regulations 2021.
The revised form will be live from the end of September and the process will come into effect on that date. It will also apply retrospectively to forms that reference the opt-out clause. We will continue to monitor the roll out of the new distribution system and further changes may be made during the trial period which runs until January 2022.
For more information please email RTNationalTransfers [at] afsa.gov.au.