Credit Counsellors Australasia

Initially some consideration must be given to how and why a new industry was able to blossom merely by the introduction of a rather innocuous piece of legislation. The intent of the legislators was apparent in so much as the purpose was to introduce what was to be a cheap and easy mechanism for debtors to resolve debt issues with their affected creditors and anticipated the administrator to be the debtor themselves, a relative or friend. Idealistically, the presumption that documentation would be able to be done or understood quickly, or with very little effort is relevant. However, as so often occurs, legislators lacked the insight to consider the willingness of the public at large to engage in what they perceive to be a sophisticated process accompanied by difficult and overwhelming documentation requiring the assistance of an ‘expert’. One could liken the concept of this industry to that of a taxation agent who promulgates a service and relies upon the inability or unwillingness of clients to undertake the paperwork for fear that the end result may be incorrect. Furthermore, the system failed to introduce statutory documentation in support of the mechanism and its presentation and delivery was ad hoc at best relying solely on the inclusion of the elements required of a proposal insofar as it should express and identify the debtor’s property to be dealt with under the agreement; specify how such property was to be dealt with; and authorise a person to deal with the identified property. It is no surprise that a layman would shy away from such an undertaking.

Given this situation the Part IX regime process, at the outset, was sufficiently complex to invite some form of  rudimentary assistance being offered to a debtor but those most likely to be available to give professional advice, lawyers and accountants, appeared disinterested. Registered trustees likewise showed no interest considering the process less of a commercial opportunity than Part X debt agreements and bankrupt estates with assets. Unsurprisingly again, the gap in an emerging market was filled by others less qualified particularly so when their involvement was not proscribed.