On 24 March 2020, the Commonwealth Government announced an increase in the threshold for personal bankruptcy actions from $5,000 to $20,000, as a temporary COVID-19 “protection” measure (r 6.03B Bankruptcy Regulations 1996 (Cth), Compilation No. 30). The increase was envisioned to ease the impact of coronavirus crisis on affected Australians.
Although scheduled to cease on 1 January 2021, the December 2020 press release has announced a permanent fixation of the bankruptcy threshold at $10,000 (r 4.02AA Bankruptcy Regulations 1996 (Cth)). As explained by the Attorney-General, Christian Porter, the doubling of the pre-pandemic rate “will ensure that Australians in financial difficulty are not made bankrupt over relatively small amounts of debt”, noting the temporary six month period for compliance with a bankruptcy notice, has reverted to 21 days, from 1 January 2021.
In light of recent amendments, only individuals with debts above $10,000 will be able to have their solvency tested with a Bankruptcy Notice and it is imperative that Creditor’s ensure they are adequately protected, by good terms of trade.
Irish Bentley Lawyers have significant experience in insolvency law. We are able to assist at all stages of the insolvency process for individuals and corporates.
Please note that the above does not constitute legal advice and Irish Bentley Lawyers make no representations or warranties as to the accuracy of any of the information contained herein. If you have a copyright issue, then please do not hesitate to contact the team at Irish Bentley Lawyers – there is no substitute for proper legal advice based on your individual and unique circumstances.
Irish Bentley Lawyers can assist Creditors to protect their position. Please feel free to contact us on 07 3229 4060 to speak with one of our Lawyers who may be able to assist you.