Australian Financial Security Authority (AFSA) is the regulator for the personal insolvency regime in Australia. AFSA is a Commonwealth Government agency and has offices in every capital city of Australia.The Inspector General in Bankruptcy (the chief public officer of AFSA) is responsible for overseeing the operations and functions of AFSA, which includes:

• Information registry;
• Official Trustee functions;
• Licences Registered Trustees and Debt Agreement Administrators; and
• Bankruptcy Regulation.

 

Information Registry

AFSA provides an information registry to the public. AFSA will provides a free telephone service on 1300 364 785. AFSA also has an extensive web site www.afsa.gov.au which provides a great wealth of information on the personal insolvency regime.

The AFSA information registry also issues bankruptcy notices for creditors wishing to apply to court for a sequestration order against a debtor.

Official Trustee

The Official Trustee administers bankrupt estates where a Registered Trustee (a Private Bankruptcy Trustee) has not consented to act. The Official Trustee is also a public officer under the employ of the Inspector General in Bankruptcy of AFSA.

The Official Trustee can appoint (i.e. out source) a bankrupt estate to a Registered Trustee. The Official Trustee will typically administer bankrupt estates which have no funds (ie no assets to realise or statutory income contributions to collect). The Official Trustee won’t charge a fee to administer the estate unless assets are to be realised or statutory income contributions are to be collected. The Official Trustee may charge a flat fee of $4,000 + 20% of realisations.

Licences Registered Trustees and Debt Agreement Administrators

The Inspector General in Bankruptcy licences and monitors Registered Trustees and Debt Agreement Administrators. To be become registered as a Registered Trustee or a Debt Agreement Administrator you need to have the minimum level of education and experience as determined by the Inspector General in Bankruptcy from time to time.

Bankruptcy Regulation

The primary function of the AFSA Bankruptcy Regulation is to monitor the activities of Registered Trustees, Debt Agreement Administrators and the Official Trustee. The Bankruptcy Regulation Unit will also attend to complaints made by creditors or debtors regarding the activities of Registered Trustees, Debt Agreement Administrators or the Official Trustee. If you wish to make a complaint about a Registered Trustee or a Debt Agreement Administrator you should write to the AFSA Bankruptcy Regulation Unit in the closest capital city in which the Registered Trustee or Debt Agreement Administrator operates.

Bankruptcy Regulation also inspects the files of Bankruptcy Trustees and Debt Agreement Administrators on an annual basis. The purpose of the inspection is to ensure compliance with the Bankruptcy Act. If non-compliance is found the Bankruptcy Regulation may refer the matter to the Inspector General in Bankruptcy or to the Courts if a serious matter is identified.

The Official Receiver’s role

The Official Receiver has a supervisory role under the Bankruptcy Act and is a public officer under the employ of the Inspector General in Bankruptcy of Australian Financial Security Authority. The Official Receiver must also maintain the National Personal Insolvency Index (NPII).

The Official Receiver is also empowered to accept or reject a debtors’ petition for bankruptcy.
Furthermore, the Official Receiver is empowered to issue notices under the Bankruptcy Act on behalf of Registered Trustees. Such notices include:

• 77AA access to premises
• 77C notice that require the production of records
• 139ZQ notice to recover property

 

Official Receiver’s notice 77AA – Access by the Official Receiver

The Official Receiver has the power to access premises to obtain books and records and can makes copies, take extracts or remove books and records that the Official Receiver considers relevant to the examinable affairs of the bankrupt.

If a Registered Trustee wishes to invoke this power the Registered Trustee must be accompanied by the Official Receiver.

Official Receiver’s notice 77C – Notice that require production of records

The Official Receiver has the power to issue a notice to any person relevant to the investigation of a bankrupt estate to:

• Deliver up information (books and records) relevant to the investigation of the bankrupt estate
• Attend the offices of the Official Receiver to give evidence under oath (either orally or in writing) regarding the investigation of the bankrupt estate

The evidence obtained by the Official Receiver on oath can be used in proceedings under the Bankruptcy Act.

Official Receiver’s notice 139ZQ – Notice to recover property

If a person has received money from a bankrupt that is considered to be recoverable under the Bankruptcy Act then the Official Receiver may issue a notice demanding that the money be repaid or for the property to be transferred to the Registered Trustee within a specified period of time.

Call the Australian Bankruptcy Service today on 1800 462 767 if you would like to learn more about AFSA’s role in the Australian Bankruptcy Regime.