At the end of 2022, AFSA quietly released detailed data on the operation of the personal insolvency system in 2021-2022. Some extracted figures and comments are here.
One initial explanatory comment is that the Official Trustee (OT) generally takes the assetless bankruptcies – about 80-85% of the total – and has a commission-based charging system; hence its figures are skewed. The OT does not administer Part X agreements.
Bankruptcies – OT
The OT administered nearly $50 million in receipts in 2021–22. Asset sales accounted for 68% of these receipts.
It administered more than $48 million in payments in 2021–22. Dividends and secured creditor payments accounted for 43% of these payments.
Bankruptcies – RTs
For the remaining 15-20% of bankruptcies, registered trustees (RTs) administered nearly $290 million in receipts in 2021–22. Asset sales accounted for only 47% of these receipts.
RTs administered nearly $268 million in payments in 2021–22. Secured creditor payments accounted for 21% of these payments, and trustee fees accounted for another 28%, at $76m. Dividends totaled $53m or nearly 20%.
RT remuneration is and was generally between 25-30% of total payments.
Part X agreements
In 2021-2022, RTs administered more than $17 million in receipts. Income contributions accounted for 10% of these receipts.
RTs administered more than $16 million in payments. Dividends accounted for 46% of these payments, and trustee fee payments accounted for another 24%.
Comparative dividend returns
As to comparative rates of dividend return, in dividend paying bankrupt estates the OT paid 7.49c/$ while RTs paid 10.79c/$. Average dividends in all OT estates were 1.41c/$ and 2.79c/$ in all RT estates.
The average dividend return in paying Part X agreements was 9.34c/$, less than an average RT bankruptcy.
Overall, the dividend differences between OT and RT administered estates are not that great considering what is said to be a large proportion of consumer or assetless estates.
Other data
Among other data:
- There were 843 objections to discharge lodged, by RTs and the OT, mainly to extend the bankruptcy to 8 years, say, 2031;
- At $30m in 2021-2022, income contributions fell as a proportion of total receipts in RT estates, while voidable transaction recoveries increased to $23.6m
- There were 54 section 139ZQ demand notices issued by AFSA, allowing recovery of proceedings of voidable transactions
- And 225 s 77CA notices were issued by AFSA, whereby AFSA takes on the task of enforcing the completion by the bankrupt of their statement of affairs for RTs.
See Annual administration statistics | Australian Financial Security Authority (afsa.gov.au)
Comment welcome.
