PIR newsletter – March 2024

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Finalising personal insolvency administrations

In line with the Regulatory Action Statement for 2023-24, AFSA is continuing to use data analytics to monitor the number of aged administrations held by registered trustees. This action aims to address system efficiency as a regulatory priority.

As noted in the June 2021 PIR Newsletter, it is AFSA’s expectation that administrations are progressed as quickly as the circumstances will allow. AFSA also expects that trustees regularly monitor and review the age of their estates and finalise them if it is appropriate.

Benefits of finalisation

Section 184 of the Bankruptcy Act 1966 provides that a trustee of a bankrupt estate is released from being trustee 7 years from the date of finalisation, as recorded on the National Personal Insolvency Index.

The effect of this release under Section 183 of the Act is to discharge a trustee from all liability in respect of any act or default made in the administration of the estate and removes the trustee from office.

By promptly finalising an estate, a registered trustee reduces the period where they are exposed to risks relating to that estate and also ends a trustee’s requirement to complete Annual Administration Returns for an estate.

Timing of finalisation

In exercising judgement regarding whether to finalise an estate, trustees should consider if:

  • They have adequately fulfilled their duties under Section 19(1) of the Act and remuneration notices have been sent when due.
  • It is still appropriate for an objection to discharge to remain.
  • There are outstanding statutory returns, including Annual Administration Returns.
  • There are outstanding complaints, reviews, or legal proceedings.
  • All income assessments have been conducted and whether there are outstanding contributions payable by the debtor, including outstanding investigations.
  • The unique circumstances of each debtor and administration, with particular reference to whether the debtor may be considered vulnerable, and the impact this may have on any non-compliance by the debtor.

It may not be necessary for a trustee to consider whether the debtor has been discharged from bankruptcy as finalisation can be completed prior to or following the date of discharge.

How to finalise

Practitioners can finalise administrations on the Practitioner AAR Online site.

If there are any questions about finalisations, please email practitionersurveillance@afsa.gov.au.

Bankruptcy Act amendment

The Australian Government has amended the Bankruptcy Act 1966 (Cth) to provide greater certainty on the calculation of bankruptcy discharge dates.

The new legislation, Bankruptcy Amendment (Discharge from Bankruptcy) Act 2023 (Cth), came into force on Thursday 23 November 2023.

The Amendment validated current practice and confirms the filing date for past, present and future bankruptcies as the date a Statement of Affairs is accepted. It also means former and current discharge dates will be validated. 

This ensures both the Official Trustee and Registered Trustees can continue to administer bankruptcies with certainty and minimal disruption for people who are bankrupt or have been bankrupt, and their creditors. The new legislation applies prospectively and retrospectively.

We have updated our website guidance to reflect the recent amendments.

For more information about the amendment, you can find frequently asked questions for insolvency practitioners as well as our full public statement on our website at Bankruptcy Act amendment.

Trustee deregistered for failure to meet Bankruptcy Act standards

On 2 February 2024, the Inspector-General in Bankruptcy cancelled the registration as a trustee of Mr Paul Leroy (Registration number 409). This cancellation was effective from 5 February 2024.

The Inspector-General found that Mr Leroy did not meet the standards of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). Specifically, Mr Leroy has failed to maintain mandatory professional indemnity and fidelity insurance cover.

Mandatory insurance cover is a fundamental requirement for registered trustees to operate in Australia.

Under the Bankruptcy Act, the immediate effect of the deregistration is that all of the bankruptcy estates Mr Leroy was responsible for administering automatically transfer to the Official Trustee in Bankruptcy (Official Trustee).

This means that effective 5 February 2024 the Official Trustee is the new trustee for these estates.

The Australian Financial Security Authority has begun directly contacting individuals whose estates were being administered by Mr Leroy prior to his deregistration, as well as their creditors.

Concurrent with the act of deregistration, the Inspector-General is investigating the management of bankrupt estates administered by the now deregistered trustee. The investigation is ongoing and further details will be provided at an appropriate time.

The Inspector-General in Bankruptcy is committed to protecting the integrity of Australia’s personal insolvency system and will continue to take swift and strong action as and when required.

State of the Personal Insolvency System Report reveals personal insolvencies expected to rise by 23% in 2023-24

On 15 December 2023, AFSA released its second annual State of the Personal Insolvency System Report which forecasted an anticipated increase in insolvencies.

AFSA collects data on the demographics of those filing for bankruptcy or entering formal debt agreements. This data, which underpins the State of the Personal Insolvency System report, allows AFSA to draw insights and patterns about the insolvency ecosystem and the wider macroeconomic system to support a strong credit system for Australia.

The report showed that annual personal insolvencies are expected to rise by 23% in 2023-24 to around 12,250 – a substantial increase from just under 10,000 recorded in 2022-23 but still below the long-term average of 23,100.

Other key insights include:

Most people who entered personal insolvency during 2022–23:

  • were between 25 and 44 years old (54.2%)
  • worked in construction (12.1%), healthcare and social assistance (11%), retail trade (9.5%), other services (9.8%), or transport, postal and warehousing (8.7%)
  • had less than $50,000 in liabilities (52.7%).

According to the report, nearly a quarter of active personal insolvencies are business-related, and they represent over two-thirds of the total system debt at $9.6 billion.

The report shows that economic challenges and cost of living pressures are causing households and individuals to experience greater levels of financial stress. Australian households now have the highest mortgage stress and highest cashflow constraints since the GFC. The number of debtors with very small saving buffers (under 10%) has increased from 15.7% in 2017-2020 to 20.58% in 2020-2023, further underlining the trend that young, renting households are the most adversely affected by economic challenges.

You can access the full report on our website at State of the Personal Insolvency System Report.

December quarter Personal Insolvency and PPSR statistics

AFSA has released the Personal Insolvency and Personal Property Securities Register (PPSR) statistics for the December quarter 2023.

Personal insolvency

Personal insolvencies across Australia have increased in the December quarter 2023 compared to December quarter 2022.

There were 2,608 new personal insolvencies in the 3-month period to December 2023 – up from 2,321 in December 2022.

National data shows personal insolvencies rose in all states and territories, except for Western Australia and the Northern Territory where numbers declined.

Of the December quarter 2023 personal insolvencies, just over a quarter (713) were business-related.

The full data is available at Quarterly personal insolvency statistics.


Statistics for the Personal Property Securities Register (PPSR) December quarter 2023 show an increase in both searches and registrations.

During the December quarter 2023, there were more than 3 million searches conducted – up 8.5% from the December quarter 2022. The most common search was for motor vehicles by serial number (53.1% of all searches).

During the same period, there were more than 540,000 new registrations created on the PPSR – an increase of 9% on the December quarter 2022. There were more than 350,000 amendments to registrations on the PPSR, and more than 390,000 registrations were discharged or removed.

The full data is available at PPSR quarterly statistics.

Update to OTPS 8 - Treatment of debts in bankruptcy

AFSA has recently released an update to the Official Trustee Practice Statement 8 - Treatment of debts in bankruptcy.


The changes are minor with a new paragraph added in section 15 Proving debts and priorities. Paragraph 15.3 includes information about the on-line proof of debt (POD) submission for estates where the Official Trustee is the trustee. 

Read the full guidance at Treatment of debts in bankruptcy.