Debt Agreement Service Newsletter September 2008

Debt Agreement Practice Statements
ITSA recently published nine Official Receiver practice statements which cover all decisions made by the Official Receiver relating to debt agreements. The practice statements will be updated over time to deal with practice changes, improvements and any emerging issues - therefore feedback is encouraged to ensure they remain complete and up to date. The practice statements should clarify many issues for you and your teams.
The practice statements cover:

Who is eligible to propose a debt agreement
When a debt agreement proposal is acceptable
Voting on proposals and proposal to vary and terminate
Cancellation of DAP
Proposal to vary
Proposal to terminate
Six month arrears default
Completion of a debt agreement
Replacing a debt agreement administrator

The practice statements can be found here on the ITSA website.

7th ITSA Bankruptcy Congress – Unravelling the Complexities
We invite you to join us for the 7th ITSA Bankruptcy Congress to be held on 30 and 31 October 2008 at the Four Seasons Hotel, The Rocks, Sydney. The ITSA Congress has become the leading personal insolvency conference in Australia. Our 2006 Congress in Brisbane was oversubscribed so I encourage you to register . Registrations received before 19 September 2008 take advantage of the $1,250 per person early bird rate.

With a theme of 'Unravelling the Complexities' and over 50 leading national and international speakers we are building on the success of previous Congresses. Full details are available on the ITSA website.

The Congress this year has two streams:

Bankruptcy law and practice;
Dealing with debt. A broad range of issues including perspectives of consumer over indebtedness, comprehensive credit reporting, an industry perspective on debt agreements and how the new system is working.

Administrators are encouraged to take the opportunity to maintain knowledge and gain a greater understanding of insolvency practice. It’s also a great chance to network with other professionals in the personal insolvency sector.

New Debt Agreement Service Forms
The DAS encourages creditors and administrators to make use of the new Proposal to Vary Debt Agreement, Notification of Completion of Debt Agreement and Notification of Six Month Arrears Default of Debt Agreement forms. They are now available here on the ITSA website.
The forms were designed to incorporate all requirements for agreements made pre and post 1 July 2007 to ensure that all information is obtained and disclosed to creditors and to ensure that these are actioned in a timely manner.

Accuracy of Debtor Details on Documents
Improving the accuracy of the debtor’s personal details on proposals prepared by administrators will ensure the information contained on the National Personal Insolvency Index (NPII) is accurate and reduce concerns of creditors who have not been able to correctly identify the debtor from the proposal and submit their vote.

Creditors’ rely on information disclosed on the debtor’s proposal to search their records. The DAS have identified an increase in the number of incorrect personal details such as dates of birth and debtor’s name. Debt agreement administrators have a responsibility to ensure they perform the necessary quality assurance checks prior to submitting documentation to ITSA. This enables the proposal to be sent to creditors for voting in a timely manner.

Reports Sent by DAS
Administrators are sent reports when proposals are accepted to send to creditors for voting, voting trend reports in the final seven days prior to the deadline date for voting and voting outcome reports on the third working day after the deadline date.

The DAS is working to better manage fluctuations in our work so we reduce delays in processing your proposals. Administrators and their staff should first refer to the relevant report as there may be no need to contact the DAS. If reports are not received or help is needed to understand the content of the reports we encourage contact.

Secured Debts
The DAS has received questions on the treatment of secured creditors where the secured asset has been sold without the creditors’ knowledge.

The DAS encourages administrators to make contact with secured creditors to ensure the debt is still considered to be secured and to be able to fully explain the circumstances of the debt on the Explanatory Statement. This ensures creditors have the full amount of information to make an informed decision. The creditor should be approached as with all secured creditors to determine their choice to receive dividends; otherwise administrators are legally required to pay them a dividend.

Feedback
ITSA values the participation of our stakeholders in the debt agreement system. Digby Ross, Official Receiver and National Manager of the DAS can be contacted on (07) 3360 5400 and Vanessa Goodey, Deputy Official Receiver and Operations Manager on (07) 3360 5435. Please continue to direct your queries on individual matters to the DAS teams in Perth and Brisbane.

Do your employees find these newsletters helpful in developing their knowledge?

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