Changes to the Bankruptcy Act have caused havoc in the debt administration industry with one major player forced to withdraw from Australia while the market leader has suffered a serious profit downgrade and the loss of 50 per cent of its market cap.Debt Free Direct, a leader in Britain's consumer debt administration scene, has given up on its Australian operation after just 18 months and with $3.5 million invested.The firm registered a mere 200 debt agreements since August 2006 despite some heavy marketing, most noticeably via a sponsored advice segment on Channel Nine's Kerry Anne Kennerley morning program.What remains of the Australian operation, apart from the Debt Free Direct brand, has been bought by Anthony Warner and his business partner Sandy Davies.Warner, a Sydney based bankruptcy trustee from CRS Warner Kugel was part of the Debt Free Direct Australia management team and is critical of the firm's business strategy.He said, though, that the July 1 changes to the Insolvency Act are the main cause of Debt Free Direct's failure in Australia."The change in the law whereby you could no longer take a set up at the beginning didn't help, and no one knew the law was changing so that was difficult. That put a real dampener on it for the UK investors," Warner said.Warner, who is currently trustee for the late Rene Rivkin's bankrupt estate, plans to continue with the operation, albeit without the brand and marketing budget, as DebtFree. "We are now issuing about 50 new debt agreements a month," said Warner. "We plan to continue that and grow that."Fox Symes, the leader in this segment in Australia, are registering about 400 debt agreements per month.They report that they have been overwhelmed with calls in the last two weeks and were forced to shut down new online enquiries for three days last week as they tackled the backlog.However the July 1 changes to insolvency law also impacted Fox Symes, said Executive Director Tim Maher."The first six-week period [after July 1] was very challenging for us, adapting our documentation, training etcetera, we experienced very low numbers in July and August."Maher says that added to those issues there was a drop off in refinancing enquiries at the same time, due to a general sub-prime/RAMS related market slow down."Thirdly, when you shift from broker to lender you shift from an upfront commission model to a long term annuity model, so all of our revenue which goes straight to the bottom line as profit is transitioning to a new model."Mortgage broking is increasingly a key element of the debt industry with refinancing often the only strategy available to indebted consumers outside of insolvency.Debt Free farms out those customers to Majestic Mortgages, while Fox Symes have embarked on an ambitious strategy to lend in their own name.FSA have lent "about $40 million in 200 mortgages" since securing a line of funding from Westpac in mid 2007.Another line of funding from Westpac secured in October for lending to distressed small business is now starting to