Bankruptcy Legislation Amendment Bill 2009
The Attorney General released draft legislation on amending the Bankruptcy Act on 25 August 2009.
The draft legislation includes many technical changes but of most interest to the average Australian the reforms to the Bankruptcy Act include:
- The Debt Agreement thresholds are likely to be increased moderately. Currently under the Bankruptcy Act if you owe unsecured creditors up to $88 379.20 you can enter into a Debt Agreement. Under the proposed bankruptcy amendments, this threshold is set to increase moderately. At this stage the rate of increase is not known however the government has previously indicated it proposed to increase this threshold by around 20%. This would mean if you have unsecured debts of less than approximately $100,000 you would become eligible for a Debt Agreement under the proposed reforms to the Bankruptcy Act. Currently if you have unsecured debts which exceed $88 379.20 you are not eligible for a Debt Agreement and you must consider a Personal Insolvency Agreement. This amendment to the Bankruptcy Act will enable consumers to access the more cost effective personal insolvency regime.
- The statutory minimum for which you can become bankrupt. Under the current Bankruptcy Laws a creditor can apply to the Court to make you bankrupt if you owe a creditor more than $2,000. The government has recognised that this is a small amount of money on which somebody can become bankrupt and is proposing that this amount be increased to $10,000.
The full Bankruptcy Legislation Amendment Bill 2009, can be downloaded from the Attorney General’s web site.
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