Annual administration statistics

Data collection and coverage

We administer and regulate Australia's personal insolvency system. We record all personal insolvency proceedings that occur under the Bankruptcy Act.

As the Official Trustee in Bankruptcy, we administer bankruptcies and personal insolvency agreements. We use information from this process to produce the Official Trustee statistics.

Registered trustees, controlling trustees and debt agreement administrators administer most personal insolvencies. We collect information from these practitioners through the annual estate return process. We use this information to produce the registered trustee statistics.

We have no information on the rate of return of debt agreements administered by practitioners who do not lodge annual administration returns.

Location

We report many of the tables in this publication based on states and territories. When possible, we report our statistics based on the state of residence provided on the statement of affairs form. Every debtor is required to lodge a completed statement of affairs form with us.

When a bankruptcy is the result of a sequestration order, we record the debtors address supplied by the court. We update this address when the bankrupt lodges a statement of affairs.

We check that all addresses of debtors are valid addresses.

How we help trustees

Commonwealth funding assistance pursuant to section 305

Section 305 of the Bankruptcy Act allows the Minister, on the application of the trustee of a bankrupt estate or of a personal insolvency agreement, to direct, in an appropriate case, that the Commonwealth underwrite the cost of proceedings or enquiries about the estate or the examinable affairs of the bankrupt or debtor.

The Minister has delegated the power to make a direction under section 305 to senior AFSA officials. In exercising their discretion under section 305, the delegates have regard to the following guidelines approved by the Attorney-General in March 2005.

Funding may be approved where:

1. either:
   
   1. the trustee has reasonable prospects of a successful outcome in proceedings initiated, or proposed to be initiated, by the trustee in the court or the Administrative Appeals Tribunal; or
   2. the trustee should defend an application for a review of a decision by the trustee in the court or the Administrative Appeals Tribunal; or
   3. a party other than the bankrupt has instituted proceedings in the court or the Administrative Appeals Tribunal that the trustee should defend;
      and the creditors have insufficient financial resources to put the trustee in funds or to indemnify the trustee against an award of costs; or
2. the actions of the bankrupt or debtor give rise to the inference that the bankrupt or debtor is intentionally breaching their obligations or duties under the Act; or
3. a significant question of law has arisen that requires resolution.

Funding will ordinarily not be approved for instituting proceedings unless:

1. the trustee has approached creditors to provide cash advances or indemnities in respect of costs, or exhausted alternative opportunities for litigation funding (generally funding will not be provided merely on the basis that creditors have refused to provide cash or indemnities); and
2. the delegate is satisfied that undertaking the litigation is consistent with the Performance Standards for Trustees in Division 42 of the Insolvency Practice Rules (Bankruptcy) 2016, particularly in relation to the standards in sections 42-40 and 42-60 of those Rules concerning the realisation of assets and incurring only necessary and reasonable costs; and
3. the delegate is satisfied that it would be appropriate for the trustee to commence the litigation.

Ending bankruptcies

Objections to discharge

Section 149 of the Bankruptcy Act provides that, in the ordinary course of events, a bankrupt is automatically discharged from bankruptcy three years and one day after the date on which they file their statement of affairs. Section 149A extends the period of a person’s bankruptcy to five or eight years in circumstances where an objection to discharge has been lodged by the trustee. Section 149D sets out the grounds on which a trustee can lodge an objection.

Our statistics show the number of objections to discharge lodged in the financial year. If a court order grants an annulment, we exclude it from our statistics. A debtor can have multiple objections lodged against them. Our statistics count each of these objections. For example, if a trustee lodges five objections to discharge in relation to the same debtor, we report five objections.

Annulments

A bankruptcy ends by either discharge or an annulment. There are several types of annulments:

• Section 74—a bankrupt can propose a composition or scheme of arrangement for settlement of all of their debts with their creditors. If it is accepted by creditors (a majority in number and at least 75% in value of the creditors voting), the bankruptcy is immediately annulled.
• Section 153A—a bankrupt can pay all of their debts in full, including the costs of the administration and the remuneration of the trustee.
• Section 153B—the court may make an order annulling the bankruptcy if it is satisfied that:
  • a sequestration order should not have been made or
  • a debtor’s petition should not have been presented or accepted by the Official Receiver.

Monies administered

Monies administered by the Official Trustee show the receipts, payments and amounts held by the Official Trustee in the Common Investment Fund (CIF).

We report on monies administered by registered trustees from their annual administration returns. Our statistics do not include personal insolvencies administered by practitioners who do not lodge annual administration returns. We perform some validation of the annual administration returns data but we do not control the quality or accuracy of the data supplied to us. We may not have received and/or validated all of the annual administration returns data at the time of compilation. We wait until we have received most of the annual administration returns we compile our statistics. We do not revise our statistics with information received after the time of compilation.

We combine a range of receipts into other receipts. Other receipts for bankruptcies and personal insolvency agreements include the following information from practitioners’ annual administration returns and the comparable measures from the Official Trustee:

• section 73 composition receipts
• funds transferred from another trustee
• trading receipts
• other receipts that are subject to the realisations charge e.g. rents, dividends, royalties
• other receipts that are not subject to the realisations charge e.g. creditor advances, indemnities.

We combine a range of payments into other payments. Other payments for bankruptcies and personal insolvency agreements include the following information from practitioners’ annual administration returns and the comparable measures from the Official Trustee:

• funds transferred to another trustee
• trading payments
• refund of surplus to debtor
• realisations charges for period receipts

Insolvency practitioners may have a single bank account for all of the individual administrations. Our statistics report on individual administrations. As a result, we exclude information such as interest charge payments.

Revisions

This publication contains minor revisions to information previously published in our annual report. We will not revise data further unless we identify an error. From time to time, we may enhance our reporting. Our guides and other explanatory materials advise of the changes and the impacts on the data.