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In this issue: Overhaul of debt agreements On 27 July 2006, the Attorney-General, the Hon Philip Ruddock MP, announced amendments to the Bankruptcy Act to improve the operation of debt agreements. These reforms are designed to ensure that debt agreements remain a viable option for debtors to deal with unmanageable debt. Click here to find further details of the amendments. Forums for administrators and major creditors will be held in September and October in Brisbane, Melbourne, Sydney and Perth. Administrators’ forums will focus on development of the new licensing regime and creditors’ forums will focus on implementation of the amendments. Efficiency gains from electronic delivery Copies of the debt agreement proposal, the Official Receiver’s report and the statement of claim and voting have been sent electronically to creditors and administrators since August. We received some feedback from creditors and administrators that their organisations benefit from the improvement to our systems. Please give us feedback on how it works for you. This advance in delivery of our services to our clients has resulted in efficiencies and a reduction of paper usage to help save the environment. Electronic copies of debt agreement proposals and completed Statements of Claim and Voting can be sent electronically by following this link itsa.qld.da@itsa.gov.au. Revised proposal form The debt agreement proposal form is being revised to improve the content of information presented to creditors to make informed decision before voting on the proposal and to provide a form suitable for electronic lodgement in late 2007. It is intended that the Estimated Payments to Creditors at Question 6 will be supported by a schedule of payments provided by the administrator. A draft of the revised form incorporating some of your feedback is attached to this email for your information. Feedback provided by stakeholders has been incorporated into the form design. Please examine this form to see whether it suits your needs and send your comments on the proposed form by return email to Katrina Woodrow. The problem with joint proposals A major advantage of preparing ‘joint’ proposals is that combined household income is used to repay the outgoings of the household and the total amount to be repaid on joint liabilities is clear to creditors. The disadvantages begin in the voting process when the joint proposal is rejected if creditors vote against the proposal of one debtor and neither debtor has made an agreement. If one debtor puts forward a proposal to terminate the debt agreement, as is often the case when the parties to a joint debt agreement separate, which creditors accept then the debt agreement for all parties is terminated. Conversely where one debtor has performed their obligations under a debt agreement the NPII will not be updated to show ‘obligations discharged’ until both debtors have performed all of their obligations under the agreement. Overall the disadvantages of join proposals outweigh the short term advantages of preparing joint proposals and it is recommended that administrators put forward separate proposals for each debtor. When must a debt agreement be varied? A variation is required whenever the provisions of the debt agreement that creditors voted on are to be changed. Circumstances requiring a variation include:
Affected creditors should contact the administrator who will prepare the variation proposal to be sent to ITSA for creditors’ vote. Quarterly numbers of debt agreements
Sixth ITSA Bankruptcy Congress Registrations for the sixth ITSA Bankruptcy Congress were closed off in the middle of July when bookings exceeded expectations. One administrator’s newsflash ran the heading News update: Bankruptcy Congress “A whopping success.” Attendees praised the introduction of “Dealing with Debt” and “Bankruptcy” streams which provided relevant topics for different sectors of the industry. Your support of the Congress and willingness to participate in various forums to improve the practices and credibility of the debt agreement system are appreciated. Feedback ITSA values the participation of our stakeholders in the debt agreement system. Your comments and suggestions for the DAS are welcomed by Digby Ross, National Manager of the DAS on (07) 33605400 and Bob Siemon, Operational Manager on (07) 33605452. Please continue to direct your queries on individual matters to the DAS teams in Perth and Brisbane. OFFICE ADDRESS: Level 16, 340 Adelaide Street, BRISBANE QLD 4000 POSTAL ADDRESS: PO Box 10443 ADELAIDE STREET BRISBANE QLD 4000 TELEPHONE: 1300 364 785 FACSIMILE: (07) 3360 5466 EMAIL: itsa.brisbane@itsa.gov.au INTERNET: www.itsa.gov.au OFFICES IN ADELAIDE BRISBANE CANBERRA HOBART MELBOURNE PERTH SYDNEY TOWNSVILLE |
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