Status update
Update – September 2025
- On Monday 25 November 2024, the Federal Court of Australia delivered its decision regarding the Official Trustee’s application for directions, which was heard on 10 April 2024.
- The Australian Financial Security Authority (AFSA) has since been implementing a path forward, with debtors and creditors, in line with the Court’s directions and reasoning.
- This follows an extensive forensic accounting review, undertaken to address poor record-keeping practices and the alleged misappropriation of funds by Sam Pos Pty Ltd (In Liquidation) (Sam Pos), the original administrator of these debt agreements.
Federal Court orders
The Court ruled in November 2024 that:
- A debt agreement only ends when both the debtor and the debt administrator have fulfilled their obligations.
- A debt agreement includes:
- The amount the debtor must pay to the administrator, and
- The amount the administrator must distribute to creditors.
As a result, some debtors affected by the alleged misconduct of Sam Pos cannot be discharged from their debt agreement as:
- The administrator’s obligations (originally Sam Pos) are unable to be fulfilled, and
- Creditors are not able to receive the full amount specified in the debt agreement.
The Federal Court decision is available for download from the Federal Court website.
What the court orders mean for debtors and creditors
For many debtors, there may be insufficient funds to meet the agreed distributions due to the alleged misappropriation by Sam Pos.
The Court noted that a variation proposal may offer a solution—allowing creditors to accept a reduced dividend and potentially bring the debt agreement to an end.
A variation proposal can only succeed with the agreement of creditors.
Next Steps
The Official Trustee is contacting affected debtors to provide guidance on how to practically conclude debt agreements where:
- The debtor has met their obligations, but
- a shortfall exists due to the alleged misappropriation by Sam Pos, and
- the administrator’s obligations cannot be completed.
Creditors will be contacted if the debtor decides to proceed with a Debt Agreement Variation (DAV). Creditors will be asked to vote to accept or reject the variation.
For information and support
We acknowledge this remains a challenging and uncertain time for both debtors and creditors. Support resources are available Support and community services.
AFSA remains committed to resolving this complex matter and keeping stakeholders informed.
For further information, please contact the AFSA Case Management Team at
OTDAtransfers@afsa.gov.au or 1300 364 785.
Background
In March 2023, the Inspector-General in Bankruptcy cancelled the debt agreement registration of Sam Pos Pty Ltd (trading as DebtCutter) due to non-compliance with the Bankruptcy Act 1966 and failure to meet the fit and proper person requirements.
Following deregistration, all existing agreements previously administered by Sam Pos Pty Ltd were transferred to the Official Trustee in Bankruptcy for continued administration.
AFSA conducted a comprehensive forensic review to address the poor record-keeping practices of Sam Pos and, where possible, identify funds attributable to affected debtors and creditors.
Investigations revealed that approximately $1.1 million held in trust by Sam Pos was allegedly misappropriated.
On 10 April 2024, the Official Trustee sought guidance from the Federal Court to determine the most equitable resolution for impacted debtors and creditors.
The Court provided its guidance on 25 November 2024.
AFSA is implementing a path forward in line with the Court’s directions and reasoning.
Please refer to the FAQs below for further details.
Frequently asked questions
AFSA received a tip-off alleging financial mismanagement within the company. An inspection identified serious issues with record-keeping and risk controls.
As a result, the Inspector-General in Bankruptcy deregistered Sam Pos Pty Ltd on the grounds that it failed to meet its obligations under the Bankruptcy Act 1966 and did not satisfy the fit and proper person requirements.
For more information, please refer to AFSA’s public statements.
Following deregistration, all debt agreements previously administered by Sam Pos (trading as DebtCutter) were transferred to the Official Trustee in Bankruptcy. These agreements are now being managed by the Official Trustee.
Yes. AFSA, through the Official Trustee, will continue to administer all transferred debt agreements until they are formally concluded.
In November 2024, the Federal Court of Australia confirmed that a debt agreement only ends when both:
- The debtor has made all scheduled payments, and
- The administrator (formerly Sam Pos, now the Official Trustee) has distributed the agreed funds to creditors.
Due to a shortfall caused by the alleged misappropriation of funds by Sam Pos, creditors have not received the full amount outlined in the debt agreements.
Even if debtors have fulfilled their payment obligations, the debt agreement remains incomplete until the administrator’s obligations are met.
Due to the missing funds:
- The debtor cannot be declared in default, but the debt agreement remains active unless formally ended.
- The debtor continues to be listed on the National Personal Insolvency Index (NPII) as having an ongoing debt agreement.
- Creditors cannot pursue the debtor for any remaining debts.
The most practical way to end these agreements is through a Variation Proposal, which asks creditors to accept a reduced final payment due to the circumstances.
A Variation Proposal allows creditors to vote on accepting a smaller final payment, enabling the debt agreement to be concluded.
Even if the debtor has completed all payments, the debt agreement will remain active because the full amount cannot be distributed to creditors.
Without a variation, the debt agreement will continue to be listed on the NPII.
The Official Trustee is currently distributing the funds it has collected to creditors.
This is a complex issue requiring extensive legal, investigative, and forensic accounting work to:
- quantify the funds allegedly misappropriated
- explore recovery options
- address inconsistencies in data due to poor record-keeping
- identify the most practical resolution for debtors and creditors.
Under the law, a Notice of Completion can only be issued once:
- The debtor has met their obligations, and
- Creditors have received the full amount owed.
Due to the $1.1 million shortfall allegedly misappropriated by Sam Pos, creditors have not been fully paid.
No. Debtors who have met their obligations will not be asked to make further payments to cover the alleged shortfall.
Debtors should continue making payments as outlined in their debt agreement.
The Official Trustee conducted a detailed forensic accounting investigation to identify and recover funds.
Approximately $220,000 was recovered at the time of deregistration. However, based on available information, it is unlikely that further funds will be recovered.
Further information
Enquiries
T: 1300 364 785
Need a translator?
If you have difficulty speaking or understanding English, contact us through the Translating and Interpreting Service (TIS) - www.tisnational.gov.au 131 450 and ask for AFSA on 1300 364 785.
Support services
Information and links to a range of support services, including financial counselling, Indigenous assistance, free legal advice, mental health and wellbeing can be found on our Where to find help managing debts page.
Commonwealth Ombudsman
The Commonwealth Ombudsman responds to complaints about the administrative actions of Government agencies, including AFSA. If you have concerns with how your debt agreement has been handled by AFSA and are not satisfied with our response to your complaint, you can contact the Commonwealth Ombudsman for assistance.
Further information is available at www.ombudsman.gov.au or by telephone on 1300 362 072.