What to do when a customer is bankrupt 107-05070010

For Debt Staff only.

This document outlines the impact on Centrelink debts when a customer is declared bankrupt.

Step	Action
1	Action debt using script + Read more ... Use the Debt Recovery script to action a debt. If the script is unavailable, use this procedure.
2	Advice from customer + Read more ... Can the customer give bankruptcy or Declaration of Intention (DOI) details? Yes, go to Step 4 No, go to Step 3
3	Customer unable to provide Bankruptcy or DOI details + Read more ... Customers can obtain their bankruptcy details from: the Australian Financial Security Authority (AFSA) their Administrator/Trustee Customers should list Services Australia as a creditor so the agency receives notification from the Administrator/Trustee. The Resources page contains a link to the AFSA website contact page. Recovery is to continue until the agency receives details of the bankruptcy. See: Arranging cash repayments to recover debts, or Withholdings Procedure ends here.
4	Check the status of the debt on the Debt List (OPDL) screen + Read more ... Status reason for write offs: D-Pend Rcvr Actn with the reason Bankruptcy Temporary (BRT), or F - Written Off with the reason Bankruptcy Discharged (BRD) Is the customer's debt written off for Bankruptcy? Yes, go to Step 5 No, go to Step 6
5	Debt written off Bankruptcy + Read more ... Discuss the reason for the call and answer any questions the customer may have. To help with the discussion, refer to DOCs to explain reasons for determinations of BRT or BRD. See: Effect of bankruptcy on family assistance overpayments Is a refund of repayments payable to a bankrupt customer Deciding whether an account was due to fraud for a bankrupt customer What to do with bankruptcy agreements If the DOCs are unclear and an explanation cannot be given to the customer: create a DOC detail what has been discussed, and refer to the Debt Administration and Bankruptcy Team region (DR1) Procedure ends here.
6	Record details of bankruptcy + Read more ... Record the details on a DOC using Fast Note - select Auto text, use Debt Recovery > Debt Recovery Referrals > Bankruptcy Team Referral. Details to include: bankruptcy number date of bankruptcy name of Trustee/Administrator amount the agency has listed in bankruptcy If the agency is not listed as a creditor, ask the customer to contact AFSA or their Administrator/Trustee to include the agency. The Administrator/Trustee will update the agency. Procedure ends here.
7	Has Australian Financial Security Authority (AFSA) or the administrator provided a Debtors Petition (original or copy)? + Read more ... $\\INTERNAL.DEPT.LOCAL\Shared\NAT\SERDELEXCEL\WORKPRODIMP\Operation Blueprint Migration\RDT Release Icons\32w\icon-specialists.png$ Yes see Step 2 in Table 3 No, go to Step 8
8	Can the customer provide details of the bankruptcy? + Read more ... $\\INTERNAL.DEPT.LOCAL\Shared\NAT\SERDELEXCEL\WORKPRODIMP\Operation Blueprint Migration\RDT Release Icons\32w\icon-specialists.png$ Yes, see Step 1 in Table 3 No, go to Step 9
9	Customer unable to provide Bankruptcy details + Read more ... $\\INTERNAL.DEPT.LOCAL\Shared\NAT\SERDELEXCEL\WORKPRODIMP\Operation Blueprint Migration\RDT Release Icons\32w\icon-specialists.png$ Recovery must continue until they can provide the following details: bankruptcy number date of bankruptcy name of the Administrator/Trustee, and report from AFSA or administrator Advise the customer to contact AFSA or their Administrator/Trustee to request bankruptcy details. They can ask for the details to be sent to the agency. See: Arranging cash repayments to recover debts, or Withholdings

Determine period of debt and if refund is required

Table 3: For staff in the Debt Administration and Bankruptcy Team only.

Step	Action
1	Contact AFSA or administrator + Read more ... Make a request by: phone Proof of Debt form See the Resources page for a link to the AFSA website. Proof of Debt forms should be authorised by APS4 Bankruptcy Debt Staff or above. Confirm the following details: name date of birth bankruptcy number date of bankruptcy type of bankruptcy, that is, debtor's petition or sequestration order Note: it is possible to search for bankruptcy details using EQUIFAX. This does not provide the Statement of Affairs. The Resources page contains a link to the EQUIFAX website.
2	Determine the period of each debt + Read more ... Check the Modify/Access Debt (OPMA) screen for each Debt ID. For specific information on family assistance debts, see Effect of bankruptcy on family assistance overpayments. For debts covering the period: before the date of bankruptcy, go to Step 3 after the date of bankruptcy, see Step 4 in Table 4 both before and after bankruptcy: use Fast Note to refer the case to the relevant Debt team. See the Resources page in Debt ownership for referral details ask for recalculation of 2 separate debts procedure ends here until complete
3	Check if refund payable + Read more ... Is a refund of repayments payable to a bankrupt customer? Yes, take the action outlined in the above procedure, then go to Step 4 No, go to Step 4
4	Dividend from bankrupt estate + Read more ... According to the trustee, is there likely to be a dividend from the bankrupt estate? Yes, go to Step 5 No, go to Step 6
5	Proof of Debt + Read more ... Trustees can request Proof of Debt. They must complete and lodge the form provided to them. This will list Services Australia as an unsecured creditor. Create a DOC using Fast Note. Document that a dividend is expected for the specific Debt ID. Payments received from dividend payments will be credited to the debt. Does the trustee require the agency to lodge a Proof of Debt form? Yes, lodge the form using details of the debt from the Debt Management and Information System (DMIS), then go to Step 6 No, go to Step 6
6	Reparation or judgement order + Read more ... Special instructions exist for customers who have a reparation and/or judgement order in place. Take the following action to check if a reparation/judgement order is pending/in place: debts under $10 000 with no indication that prosecution is pending or proceeding, go to Step 8 debts $10 000 and over, check the customer's record for DOCs relating to prosecution. If no DOCs exist: email Fraud Investigation Branch - Coordination team include details of the case, to check if the debts are covered by the reparation order note the date of when the reparation and/or judgement order was placed Is a reparation order or a judgement order in place? Yes, go to Step 7 No, go to Step 8
7	Reparation order and/or judgement order in place + Read more ... Orders made before bankruptcy: only recoverable by 'proving' the debt for the bankruptcy cannot be recovered after the person has been discharged from bankruptcy Was the reparation order and/or judgement order obtained before the date of bankruptcy? Yes, the debt is not recoverable after bankruptcy. Permanently write off the debt. See Step 3 in Table 4 No, the reparation/judgement order has no bearing on the bankruptcy, go to Step 8
8	Determine if the debt is due to fraud + Read more ... Is the debt due to fraud? Yes, recovery will recommence after the customer is discharged from the bankruptcy period any debt incurred by fraud that forms part of a bankruptcy, must be rolled over into a subsequent bankruptcy/s, whether concurrent, consecutive or otherwise the creditor (Services Australia) can pursue the debt(s) by the usual methods after the customer has been discharged from bankruptcy see Step 1 in Table 4 No, recovery will not recommence after the customer is discharged from bankruptcy. See Step 3 in Table 4