Document ID: chunk:federal_register_of_legislation:F2020L01668:body:0:p7
Version: federal_register_of_legislation:F2020L01668
Segment Type: other
Provision Reference: 
Character Range: 16563–19682

obligations that arise under a proposed variation to the proposal as and when they fall due. Where sub-section 185M(1DB) of the Act applies to a variation, an administrator will also need to certify that there are reasonable grounds to believe that the debtor has experienced a substantial change in their circumstances since their proposal was accepted, that they cannot meet the obligations of their current agreement and that the overall total payments of the agreement have not increased in the variation proposal.

3.24 Only the administrator can sign the sub-sections 185C(2D), 185M(1DB) and 185M(1F) certificates. This duty cannot be delegated by the administrator.

3.25 In assisting debtors to make informed choices about alternative means of dealing with financial difficulty, the administrator will need to:

       * be capable of providing debtors with information about the options available to them, including but not limited to insolvency options under the Act

       * understand the general bankruptcy concepts relevant to a debtor formulating a debt agreement proposal and completing a statement of affairs that discloses income, property and liabilities

       * be able to explain to a debtor the differences between the various options and the consequences.

3.26 To be capable of doing this, the type of general insolvency and business knowledge expected includes the following matters:

       * A basic knowledge of the Act. In particular, an applicant will need to know the options available along with the impact of these on a debtor. This would need to include the bankruptcy, personal insolvency agreement and debt agreement options available under the Act; how people become bankrupt; what property  could be retained; the rights of creditors and those applying for bankruptcy; income contributions and a general awareness of antecedent transactions.

       * A detailed knowledge of debt agreement legislation detailing the duties of an administrator including legislative requirements for a debt agreement administrator to cooperate with the Inspector-General's inquiries and investigations.

       * A general knowledge of other financial and banking options available including refinancing, mortgages, informal arrangements and banking industry hardship provisions.

       * Knowledge of common business structures such as companies, partnerships, trusts and sole traders, the liability implications arising from these structures, commercial and financial transactions and documents, including leases, hire purchase, guarantees, caveats, mortgages and other security, and basic contract law.

3.27 To properly certify that they have reasonable grounds for believing that the debtor is likely to be able to discharge the obligations created by the agreement as they fall due, an administrator will be expected to demonstrate the following abilities based on their knowledge and business systems:

       * to discern between financial choices and understand money and debt, including how to budget and plan

       * to recognise and competently inform debtors on life