Credit Counsellors Australasia

Although the action brought against the debt agreement administrator commenced in 2004 the issues raised in the matter had been verbalised for some time and ITSA had commenced a series of roundtable conferences consulting with consumer groups, creditors and debt agreement administrators with a view to raising the standard of professionalism of administrators. In a paper presented at a 2002 roundtable meeting with administrators further issues arose, being in part:

• timely distribution of dividends to creditors;
• bogus creditors being added to proposals, by administrators;failing to process a proposal until up front fees had been paid;
• deliberately not disclosing creditors on statements of affairs.

Both the process and the methods were being highly criticised by major stakeholders including some administrators and it became evident that further and additional changes needed to be made if the Part IX regime was to survive. In May 2003 further regulatory amendments were made and in particular the requirement that administrators were proscribed from acting in that capacity if that person had been discharged from bankruptcy in the previous 10 years, proposed a debt agreement or Part X or submitted a S188 in the previous 10 years.

Regulatory controls were also put into place causing the actions of administrators to be subjected to the scrutiny of Bankruptcy Regulation Branch, a division of the office of the Inspector-General in Bankruptcy. These amendments saw the exit of a number of administrators from the industry and a further number being denied the authority to act in that capacity.