The Bankruptcy Amendment (Debt Agreement Reform) Act 2018 received Royal Assent on Thursday 27 September 2018. The majority of the amendments commenced on 27 June 2019.
However, it is not expected that the payment to income ratio (a new debt agreement eligibility requirement) and the industry-wide debt agreement administrator conditions will commence on that date. Those changes depend on legislative instruments which are yet to be settled by government. AFSA will advise stakeholders in advance of those amendments becoming operative.
These reforms provide tighter regulation of the debt agreement regime. They improve industry standards by setting enhanced registration and practice requirements; introduce tougher penalties for wrongdoing and grant the Inspector-General in Bankruptcy additional investigative powers to address administrator misconduct.
The reforms include changes to:
- the length of a debt agreement a debtor can propose
- debtor eligibility to enter into a debt agreement
- the Official Receiver’s powers to refuse to accept a debt agreement proposal in exceptional circumstances
- creditor voting rules around debt agreements
- debt agreement administrator registration requirements
- the Inspector-General’s investigation and inquiry powers.
Further information regarding this Act can be found at the Parliament of Australia website.