The Australian Government will introduce reforms to ensure Australia's bankruptcy system is fairer and operates in the best interests of all Australians.
Key changes include:
- Increasing the threshold for involuntary bankruptcies from $10,000 to $20,000, with the threshold to be indexed each year;
- Increasing the timeframe in which a debtor may respond to a bankruptcy notice from 21 days to 28 days;
- Reducing the period a discharged bankruptcy is publicly recorded on the National Personal Insolvency Index to seven years following discharge from bankruptcy; and
- Removing the proposal, or acceptance, of a debt agreement as an act of bankruptcy for the purposes of subsection 40(1) of the Bankruptcy Act.
These amendments will ensure a fairer outcome for debtors in the personal insolvency system and reduce the stigma currently associated with entering into bankruptcy.
In addition, the Attorney-General's Department is today commencing consultation on the introduction of a Minimal Asset Procedure in Australia.
A Minimal Asset Procedure would clear a person's debts and allow access to a fresh start sooner than a bankruptcy, where that person has no other way to pay. Importantly, it should also leave creditors no worse off - meaning Australia's personal insolvency system remains fair and balanced.
Submissions for the consultation on a Minimal Asset Procedure in Australia close on 29 July 2024.
To access the discussion paper and to make submissions visit: Personal Insolvency Consultation - Minimal Asset Procedure on the consultation hub.
