Submission: Review of Debt Agreements Under the Bankruptcy Act 1966
Consumer Action has provided a submission to this review of debt agreements undertaken by the Attorney-General’s Department. The submission:
- argues for a minimum income threshold to access debt agreements in order to discourage debtors from entering into debt agreements when bankruptcy would be a better option;
- argues that statistics appear to show that termination rates have increased following the 2007 reforms, despite claims in the consultation paper to the contrary;
- advises against creating a statutory duty of good faith for debt agreement administrators, and instead recommends that administrators be required to complete a statement of suitability certifying that a debt agreement is, in their opinion, a suitable option for the client compared to bankruptcy or any other option;
- recommends that the Bankruptcy Act be amended to require that advertisements for debt agreements clearly set out that proposing a debt agreement is an act of bankruptcy, that applying for a debt agreement will be listed on the debtor’s credit report and on the NPII, and that debtors should seek advice from a financial counsellor before entering into an agreement; and
- recommend that that administrators be required to provide information to debtors comparing the administrator’s fees to average fee levels charged in the industry.
To read our submission, click here: Review of Debt Agreements Under the Bankruptcy Act 1966.