LEGISLATION TO REFORM PERSONAL BANKRUPTCY LAWS
28 October 2009
Attorney-General, Robert McClelland, today introduced legislation into Parliament to implement significant reforms to Australia’s personal bankruptcy laws.
The Bankruptcy Legislation Amendment Bill 2009 seeks to modernise personal insolvency arrangements by recognising that the majority of bankruptcies relate to consumer debts and involve people with relatively few assets and little income, rather than unscrupulous debtors trying to avoid paying their debts.
“The amendments will give those in financial distress a more realistic opportunity to consider their options, reorganise their affairs and where possible, avoid bankruptcy,” Mr McClelland said.
The Bill introduces a number of reforms, including:
- increasing the minimum amount for which a creditor can petition for bankruptcy from $2,000 to $10,000;
- 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 to 28 days;
- increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements;
- introducing a more efficient and transparent process for fixing and reviewing trustee remuneration;
- strengthening the penalties for some offences, particularly those involving fraud; and
- enhancing powers for the Inspector-General in Bankruptcy to investigate possible offences.
To ensure that our system for dealing with bankruptcy is fair to both debtors and creditors, the reforms will provide more opportunity for debtors to obtain advice and encourage the negotiation of debt agreements that can have better outcomes for both creditors and debtors.
“The reforms will also promote good faith disclosure and negotiation by imposing additional penalties for fraudulent conduct.”
The Bill has been the subject of extensive public consultation following the release of an Exposure Draft in August this year.
Media Contact: Adam Siddique 0407 473 630
