By Janine Perrett

Finally someone put a nail in the coffin of the corporate undertakers - only the bad ones of course.

The passing of the Insolvency Law Reform Bill in the Senate this week is a long overdue crackdown on liquidators.

It is an industry which had more than its fair share of greedy rapacious types who were for years were ripping off already suffering creditors.

Like blood-sucking vampires the worst of them would be impossible to remove except in rare cases which took years of expensive court proceedings. Paid for out of the creditors dwindling funds of course.

Financial journalists like myself heard countless stories over the years from desperate victims about liquidators misusing the precious remaining funds and installing themselves for years on end; the politicians heard the same complaints.

One decided to do something about it.

Sure it took him seven years but then Senator John "Wacka" Williams is nothing if not tenacious.

Yes, that  would be the same senator who has taken on the banks, including CBA, ASIC and numerous other financial industry rogues he feels need outing.

Back in 2009 he began his quest to clean up the liquidators after hearing the stories of ordinary people who were powerless to do anything themselves. He initiated a Senate Economics References Inquiry into Liquidators and Administrators which, he said "shone the light on some bad practices in the industry".

It also found fault with the inaction of the Australian Securities and Investment Commission, which would not be the last time the corporate watch-puppy felt his ire.

Fast forward to this week's bill which has a number of provisions which seem so obvious you will be incredulous at how unregulated was the industry beforehand.

For example previously an applicant only had to complete a form and pay fee to become a liquidator whereas now they will have to satisfy a three person panel that they are fit to be a liquidator.

And they might even have to sit a written exam. Gosh!

Regulators will also be able to impose conditions in relation to continuing education or insurance.

"I am pleased to see that registration has to be renewed every three years including a renewal fee and evidence they have ongoing insurance coverage" said Senator Williams.

It seems incredible that these simple basic provisions are only now being sought. No wonder the industry was ripe for rogues all these years.

Of course the bad ones were an exception and not  reflective of the overall industry.

Just like the financial planners the Senator has investigated previously - but there sure are enough of them to raise concerns and there is a pattern of inaction by the regulator that reflects a deeper malaise.

Now ASIC will have the power to suspend or de-register liquidators for certain breaches and if it is no satisfied it can be referred back to the three person committee.

Most importantly creditors will have more rights to request information and ultimately will be able to vote for the removal of a poorly performing practitioner.

It will simply take the vote of the majority of creditors.

"These reforms are a step in the right direction to getting confidence back into the industry both from practitioners and consumers" Senator Williams said.

It is small bill but huge relief for people who have already lost everything in a company collapse and must wait years to fight for the few cents in the dollar that can be retrieved by the liquidator and they are all the liquidators' mercy.

Not everyone can be as canny as the Anchorage Capital private equity boys and grab hundreds of millions off Australian investors and get their money out only a year before it goes under.

The reforms received bi-partisan support in parliament, which is good given Clive Palmer's creditors might need help soon.