AFSA sets its regulatory priorities for 2026–27
AFSA has released our 2026-27 Regulatory Action Statement (RAS), which outlines our key priorities for the year across the personal insolvency and personal property securities systems.
Our three regulatory priorities are:
- manipulation of personal insolvency proposals
- harmful debt agreements
- misuse of the Personal Property Securities Register (PPSR).
AFSA will also continue to maintain a strong focus on our enduring priorities and take appropriate regulatory action where we detect matters involving:
- misappropriation of trust funds for personal gain
- inappropriate fee practices and unjustified prolonged estate administration
- concealment or disposal of assets with the intent to defraud creditors.
Trust and confidence are critical to the effective operation of Australia's insolvency and credit systems.
As personal insolvencies rise and financial vulnerability increases, AFSA is focused on protecting the integrity of the systems we regulate. This requires collective stewardship from regulators, practitioners, creditors and industry participants, each playing their part to uphold professional standards and support fair outcomes.
Key outcomes from 2025-26
AFSA's regulatory priorities are informed by the work undertaken throughout 2025-26 to identify emerging risks, improve outcomes for vulnerable Australians and strengthen confidence in the systems we regulate.
Some of the outcomes we achieved during 2025-26 include:
- reviewing 278 personal insolvency proposals to identify risks and strengthen oversight of proposal practices
- assessing more than 6,000 debt agreement proposals, with a focus on affordability, fee transparency and ensuring agreements were suitable for the individuals entering them
- increasing compliance and enforcement activity where concerns were identified
- helping facilitate the removal of more than 200,000 outdated PPSR registrations.
During 2025-26, we continued to review our approach to debt agreement affordability, fee transparency and informed decision-making to help ensure better outcomes for consumers and strengthen confidence in the debt agreement system.
This work has directly informed our decision to continue focusing on harmful debt agreements in 2026-27. Given the financial vulnerability of many people who rely on debt agreements, AFSA will continue to focus on affordability and sustainability, informed choice and fee transparency.
Help us identify harm early
The 2026-27 RAS reinforces our commitment to proportionate, evidence-based regulation focused on the areas of greatest harm.
Professionals, creditors and individual participants play an important role in helping us detect misconduct and vulnerabilities in the personal insolvency and personal property securities systems.
If you suspect wrongdoing or have concerns about an industry participant, you can submit a tip-off via our website. Early information helps us assess issues and act where appropriate.
By working together, we can strengthen trust and confidence in Australia's personal insolvency and credit systems and ensure they continue to deliver fair, effective outcomes for the people who rely on them.
Read more about the 2026–27 Regulatory Action Statement and summary of our 2025–26 outcomes.
Indemnity or voluntary payment?
The Inspector-General in Bankruptcy has observed some voluntary payments being incorrectly treated by registered trustees as indemnities. As a result, some payments are being incorrectly reported as ‘Other receipts not subject to the realisations charge’ at the time of preparing Annual Administration Returns.
What is an indemnity
An indemnity is a legally binding promise where one party agrees to accept the risk of financial loss and compensate another party for specific damages, claims, or losses. This effectively shifts the liability for potential costs from the affected party to the indemnifying party.
In the context of a bankrupt estate, a registered trustee may receive an indemnity when they anticipate being faced with costs beyond the basic administration of the estate. An example is when a trustee proposes action to recover funds for the benefit of creditors. This generates costs and the trustee may highlight to creditors that without an indemnity, the action will not be taken because of a lack of funds.
What is a voluntary payment
In our May 2026 PIR newsletter, specific conditions were outlined which apply to voluntary payments made by a debtor, bankrupt or third party. Trustees must explain and document those conditions before receiving the payment, even where doing so may reduce the likelihood of the payment being made.
For more information, visit When would a financial contribution be made voluntarily by a debtor?
Importance of context and correct processing of receipt
As outlined in Inspector-General Practice Direction 6, where a trustee receives a voluntary payment compliant with the specification outlined above from the bankrupt or third party and applies it in payment of remuneration and costs, they receive the money in the capacity as trustee of the estate. The money must be deposited into the appropriate administration account on behalf of the estate and a realisations charge is payable on the money. AFSA’s position has been reflected in Section 5.9 of the ARITA Code of Professional Practice (COPP).
Making sure the receipt of funds is processed correctly is essential to ensure the trustee’s records reflect the true position of an administration and the correct amount of realisations charge is calculated and remitted by the trustee.
The instructions to trustees included in Inspector-General Practice Statement 7 must also be followed at the time an Annual Administration Return is prepared to ensure the correct realisations charge payable is calculated.
Important references
Sections 6, 7A and 8 of the Bankruptcy (Estate Charges) Act 1997 define the realisations charge, the amounts treated as being received, and how to work out the amount on which charge is payable, respectively.
It is noteworthy that Section 7A was introduced into the Bankruptcy Act as an anti-avoidance provision.
Importance of proper adjudication of creditors’ claims for voting purposes
In bankruptcy administration, the trustee’s responsibility to adjudicate creditors’ claims for voting purposes is central to maintaining a fair and lawful decision‑making process.
Under the Bankruptcy Act, trustees must assess the value and validity of each creditor’s claim before allowing that creditor to vote at a meeting. This assessment determines the voting strength attached to each claim and ensures that resolutions are documented and reflect the true financial interests involved.
Accurate adjudication supports the integrity of the administration and the broader insolvency system. When trustees verify supporting documents, apply consistent standards, and clearly record the basis for accepting or rejecting claims, they uphold their statutory duty to act impartially and in the best interests of all creditors. Proper adjudication also reduces the risk of disputes or challenges to the validity of resolutions. This can arise if creditors believe the voting process was influenced by incorrect or inconsistent claim assessments.
Risks of preferential treatment
If the adjudication process is not carried out with care and in line with legal requirements, there is a risk the vote of some creditors may be preferred over others. Overstating or allowing a creditor’s claim, without proper basis, can give that creditor disproportionate voting power, allowing them to influence resolutions in a way that does not reflect the estate’s actual position. Conversely, undervaluing or improperly rejecting a claim can unfairly reduce a creditor’s ability to participate in decisions that directly affect their recovery.
Such errors can distort outcomes on a range of matters, including on those concerning personal insolvency proposals, either under Part X or section 73 of the Bankruptcy Act.
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