Inspector-General Practice Direction 8

IGPD 8 - Solicitor controlling trustees eligibility requirements
Date of release: 
October 2009
Last updated: 
August 2013

A controlling trustee can be a solicitor, registered trustee or the Official Trustee in Bankruptcy. You can access a list of registered trustees or the Official Trustee in Bankruptcy through the AFSA office in your closest district from our contact us page. Solicitors with insolvency knowledge can be identified from the Yellow Pages.

Controlling trustee eligibility requirements

On 1 December 2004, new eligibility requirements for solicitor controlling trustees were introduced. Bankruptcy Regulation 8.35(1)(f) will provide that for subsection 188(2A) of the Bankruptcy Act 1966 a person (other than the Official Trustee or a registered trustee) is not eligible to act as a controlling trustee if the person has not by 1 December 2006:

  1. become a full member of the Australian Restructuring Insolvency & Turnaround Association (ARITA) or
  2. satisfactorily completed a course in insolvency approved by the Inspector-General.

Powers and obligations

Controlling trustees have a number of powers and obligations once they have an effective s188 authority to work from. An effective authority is one where the debtor has signed a s188 authority and the controlling trustee has consented to act by attaching their signature to the authority.

Once an effective authority is in existence, the control of the debtor’s property is transferred over to the controlling trustee. This continues until one of the following occurs:

  • the creditors resolve that the property is no longer subject to control
  • a personal insolvency agreement is executed by the debtor following the resolution of creditors, at which time the control is transferred to the trustee
  • a period of four months has elapsed from the time of the authority being accepted
  • the Court releases the debtor’s property
  • the debtor becomes a bankrupt or dies

A controlling trustee’s powers to deal with property include the ability to:

  • take immediate control of the debtor’s property and financial affairs
  • make such enquiries and investigations in connection with the debtor’s financial affairs as considered necessary
  • carry on the business of the debtor, if it will be in the best interests of creditors to do so
  • deal with the debtor’s property in way that will be in the interests of creditors.

In addition, the controlling trustee will be required to:

  • inform the debtor or their rights and obligations
  • notify the debtor's creditors that a s188 authority has been given
  • call a meeting of creditors to consider a proposal offered by the debtor under Part X
  • give information about the controlling trustee's administration to the debtor who reasonably requests it
  • ensure the debtor discharges their duties under the Bankruptcy Act
  • give consideration to any offences the debtor may have committed under the Bankruptcy Act and refer to our Regulation and Enforcement area for prosecution.