Attorney-General, Robert McClelland, released proposed reforms to Australia’s personal bankruptcy laws on 25 August 2009. The key features of the reforms include:
- Increasing the minimum debt for which a creditor can petition for bankruptcy from $2,000.00 to $10,000.00;
- Increasing the stay period from when a declaration of intent to file a debtor’s petition is filed to when a creditor may commence action to recover debts from seven (7) to twenty-eight (28) days;
- Increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements; and
- Strengthening the penalties for certain offences to reflect the seriousness of the conduct and to bring it in alignment with similar offences in other legislation.
The proposed reforms aim to recognise that the majority of personal bankruptcy matters involve people who have fallen on hard times, rather than people who are avoiding payment of their debts unscrupulously.
The draft Bill is open for public comment until Monday 14 September 2009, and can be found at www.ag.gov.au (the Attorney General’s Department website).