22 Nov Changes Expected in November 2015 to Public Disclosure of Part IX Debtor Records
It is a common question for an insolvency practitioner to be asked by a debtor contemplating one of the formal personal insolvency options; How long will this be on the public record? Up until now the answer has been ‘forever’ regardless of the insolvency type being discussed.
Up until November 2015, any debtor that has proposed or entered into a Part IX Debt Agreement has had their personal details recorded indefinitely on the National Personal Insolvency Index (NPII), identifying that debtor, by name, date of birth and address, as having proposed or entered into a Debt Agreement on a certain date. This information is publicly available, for a fee.
As a result of a review conducted by the Government following the March 2014 amendments to the Privacy Act 1988, it was decided the timeframe that Part IX debtor details would be publicly available (currently indefinitely) would be limited, depending on when the agreement was made and how it ends.
The table below explains what time limit will apply for the various possible outcomes of a Part IX:
|Outcome of Part IX||New Time Limit Before Personal Information is Supressed|
|When the debt agreement ends (s185N)||5 Years from the date the agreement is made, or the date the obligations are discharged, whichever is the later.|
|When the debt agreement is terminated (s185P, s185Q, s185QA or s185R)||5 years from the date the agreement is made, or two years from the date of termination, whichever is the later.|
|When the debt agreement is declared void by the court (s185U)||5 years from the date the agreement is made, or two years from the date of the court order, whichever is later.|
|Where debt agreement proposal is withdrawn, not accepted by creditors, cancelled (s185ED) or lapses (s185G)||Within 1 year of the proposal being withdrawn, rejected, cancelled or lapsing.|
*Section references are to the Bankruptcy Act 1966 The Australian Financial Security Authority (AFSA) expects these changes to occur in November 2015.
Outside of the above time limits, the personal information of the debtor will be supressed, meaning it will no longer be available to the public (including credit reporting bodies). This is likely to increase the appeal of a Part IX to individuals currently facing financial difficulty.
Registered Trustees and Debt Agreement Administrators will still have access to a debtor’s Part IX history, if any, for up to 10 years, but only for the purpose of determining a person’s eligibility to make a debt agreement proposal.
If you would like any assistance relating to debt agreements, please contact our team on 1800 246 801.
Article written by Matthew Bookless, Director, Queensland.