The Personal Insolvency Regulator (PIR) is a quarterly newsletter from AFSA.
Follow up from the Attorney-General's Ministerial roundtable
Following from the March edition of the PIR Newsletter, key stakeholders joined Attorney General, The Hon Mark Dreyfus KC MP at a roundtable event to discuss reform opportunities in the personal insolvency system.
The roundtable brought together professionals from the credit, finance, accounting, and legal sectors as well as consumer groups to discuss personal insolvency priorities and emerging issues, increasing effective collaboration between government and key stakeholders in the development of personal insolvency law reform.
Issues identified by attendees as being priority issues for further exploration and policy analysis by the Attorney General’s Department included:
- increasing the bankruptcy threshold value from $10,000
- options for a shorter discharge period from bankruptcy for some people who are
- options for easier annulment for inappropriate bankruptcies
- increasing the period for a debtor to respond to a bankruptcy notice from 21 days
- options to identify and scope measures to address poor practice by pre-insolvency advisors (often referred to as untrustworthy advisors).
A full summary of the event is available on the Attorney-General's Department website: Ministerial Roundtable on Personal Insolvency: summary
Annual Trustee Return and Significant Events forms are changing
AFSA is changing the way Registered Trustees access and process their Annual Trustee Return form (Form 32) and Notification to the Inspector General of Significant and Other Events form (Form 33) to make it easier and more efficient to complete.
From early July 2023, the forms will be available in a single, live dashboard within the Online Insolvency Services Portal, easily accessible from the practitioner’s portal on the AFSA website.
For trustees, this makes it a streamlined process for completing and submitting returns and notifications, ensuring that information can be provided quickly and accurately. When entering the portal, there will be prompts to complete most of the fields. Some information, such as contact details, will pre-populate.
Details can be updated any time throughout the year.
Every year on the anniversary of registration, Trustees will be prompted to review their details on the dashboard. Trustees will need to enter the portal and check the information is true and correct. Once the information is verified, they click ‘submit’.
If there is a significant or other event Trustees must notify the Inspector-General about, they must update the information in the dashboard within 5 business days (IPRs 35-1). Any information that is provided in relation to a significant event will also be reflected at the next anniversary of a Trustee’s registration.
The process for Proof of Debt forms has already changed and can be accessed from the AFSA website.
Statutory requirements for filing your consent to act as trustee
AFSA would like to remind practitioners about the filing requirements for Consents to Act, particularly those relating to creditor’s petitions and sequestration orders.
For estates where a person is made bankrupt by a sequestration order by the Court, trustees must ensure that any consent to act is filed with the Official Receiver before the sequestration order is made by the Court.
This is required under section 156A(3) of the Bankruptcy Act and section 47 of the Bankruptcy Regulations.
Filing a consent to act with the Court does not meet the filing requirements of the Official Receiver.
If a consent to act is filed with the Official Receiver on or after the day on which a sequestration order is made, then the Official Trustee will be appointed by default, or the Official Trustee may offer the estate to another registered trustee.
Please contact the AFSA Service Centre on 1300 364 785 if you need any clarification.
AFSA Personal Insolvency Stakeholder Forum
AFSA thanks our stakeholders who joined us for a dynamic discussion on how AFSA can work together to help make our system stronger at June’s Personal Insolvency Stakeholder Forum.
AFSA thanks everyone who participated online and in person for willingly sharing their insights and ideas around education, compliance and enforcement. Key themes included ways to help simplify and streamline services, disrupt untrustworthy advisors and increase accessibility and education for our community.
Chaired by AFSA Chief Executive Tim Beresford, the interactive forum provided an opportunity for our stakeholders to come together to learn more about personal insolvency trends, and share industry and organisational updates. Participants also discussed how we can use our collective insights and continue the conversation to address harms and the impact of the rise of personal insolvencies post-pandemic.
Guidelines relating to Capital Gains Tax - IGPG3
In June 2021, the Australian Tax Office (ATO) published guidance for Trustees reminding them of the ATO’s position that capital gains tax (CGT) applies to assets sold in a bankrupt estate and is to be remitted to the ATO, a requirement which makes Trustees personally liable for payment.
This guideline is relevant for Trustees who realise an asset of the administration for which CGT applies.
The full guideline can be read at the AFSA website.
AFSA at the Financial Counselling Australia Conference
Last month, AFSA connected with financial counsellors in Canberra at the 2023 Financial Counselling Australia conference.
Connecting with industry leaders
Under the theme, 'A Seat at the Table', more than 800 industry leaders from around the country come together in Canberra on 17-18 May.
AFSA staff were on hand to connect with stakeholders and discuss our levers of education, compliance and enforcement whilst also sharing information about personal insolvency and the Personal Property Securities Register (PPSR).
AFSA Chief Executive Tim Beresford took the stage on day 2 to speak about how insolvency strengthens the credit system.
He reinforced how AFSA is working to educate people about financial literacy, how we foster compliance by protecting the vulnerable and delivering services that are smart, secure, simple, and accessible, and how we drive enforcement by disrupting untrustworthy advisors.
AFSA and ASIC release mental health brochure for insolvency practitioners and their staff
Insolvency practitioners and their staff may engage with stakeholders who are facing mental health issues. Practitioners and their staff can also face these issues in their own personal and professional lives.
The Australian Securities Investments Commission (ASIC) and AFSA have released a mental health resource to provide information and resources that can assist when dealing with these complex personal issues.
The guide can also help insolvency practitioners and their staff respond to everyday challenges around mental health.
To download the brochure at: AFSA Resource hub.