IGPS 13 Annexure A: Areas of expected knowledge for a person applying to be a registered trustee

Inspector-General Practice Statement 13 explains the processes for registration of trustees.

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Interview questions

The interview questions have been developed to test an applicant’s knowledge and ability to practice as a registered trustee. Below is a list of subjects applicants are expected to be familiar with before being interviewed by a committee.

Applicants are expected to prepare for the interview with private study, but also through practical experience working as a senior level staff member in insolvency.

The subjects listed below may not cover all questions asked in an interview. The list is not exhaustive, and committee members may ask other questions relating to subjects not listed to satisfy themselves that the applicant shows the requisite knowledge and ability to be registered as a trustee.

Technical questions – possible subjects:

  • Administrations under the Bankruptcy Act 1966 (‘the Act’) – understanding the different insolvency options including eligibility, consequences and restrictions
  • Duties and powers of a trustee
  • Commencement of an administration – initial process and procedures for a bankruptcy, general reporting obligations
  • Types of claims – which debts are provable or not provable and the effect of provable debts
  • Joint and separate estate – rules in terms of dealing with different types of property
  • Equitable concepts relevant to bankruptcy – such as the presumption of advancement, doctrine of exoneration, subrogation, right of contribution by joint debtor
  • Priority payments – applying the proper order of payments of priority debts in accordance with section 109 of the Act and section 25 of the Bankruptcy Regulations 2021
  • Income contributions – what constitutes income under the Act, trustee powers relating to income contributions, recovery options for trustees, application of fringe benefits, alternative approaches to assessing a bankrupt’s income
  • Property and Assets – realising divisible property, exempt property, after-acquired property, recovery options available to a trustee, time limits of recovery action
  • Meetings of Creditors – procedure of holding a meeting of creditors, understanding ordinary and special resolutions, application of casting votes, adjudication of claims
  • Offences – understanding different offences under the Act, ability to identify and refer offences
  • Antecedent transactions – understanding the application and features of different types of antecedent transactions, recovery options available to a trustee
  • Personal Insolvency Agreements – process and procedures undertaken by the controlling trustee, controlling trustee duties, reporting obligations, processes to the meeting of creditors to consider accepting a personal insolvency agreement
  • Section 73 proposals – process and procedures to review proposal, reporting obligations, processes to the meeting of creditors to consider accepting a section 73 proposal
  • Annulments – understanding of different types of annulments, circumstances when each type of annulment can occur
  • Tax – GST obligations on the trustee, trust income tax, bankrupt’s tax affairs  
  • Remuneration – principles relating to remuneration, reporting obligation
  • Dividends – procedures and notices
  • Objections to discharge – understanding different types of grounds, when it is necessary to lodge an objection against a bankrupt’s discharge
  • Rights of creditors and debtors under the Act – request for information, access to administration file
  • Inspector-General powers to review decisions of trustees
  • Realisations and interest charge – calculations including knowledge of permitted deductions
  • Funds handling
  • Companies – effect of company liquidations, trusts and Director Penalty Notices on individuals
  • Interaction of bankruptcy law with other areas of law – partnership, family law and trusts.

Ethical questions – possible subjects:

  • Performance Standards – knowledge and application of performance standards under the Insolvency Practice Rules (Bankruptcy) 2016, ARITA Code of Professional Practice, APES 110 and 330
  • Conflict of interest and independence – whether actions as a trustee would lead to a conflict of interest or a perception that a trustee is not independent 
  • Complaints handling procedures
  • Fit and proper assessment – general questions to demonstrate an applicant being a fit and proper person
  • General ethical questions