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(Sep 03, 2009) On August 25, 2009, the Attorney-General's Department of Australia issued for public consultation details of the country's planned reform of personal bankruptcy laws. The Bankruptcy Legislation Amendment Bill 2009 recognizes "that the majority of bankruptcies relate to consumer debts and involve people with relatively few assets and little income"; those who, as Attorney-General Robert McClelland noted, "have simply fallen on hard times rather than unscrupulous debtors trying to avoid paying their debts."The bill amends the Bankruptcy Act 1966. (Press Release, Attorney-General for Australia, Reforms to Personal Bankruptcy Laws (Aug. 25, 2009), available at http://www.attorneygeneral.gov.au/www/ministers/robertmc.nsf/Page/MediaR
eleases_2009_ThirdQuarter_25August2009-ReformstoPersonalBankruptcyLaws
.)

The government says that the bill gives those facing bankruptcy more of a real chance to assess their options, reorganize their finances, and possibly avoid bankruptcy, by means of the following proposed measures, among others:

  • increasing the minimum debt for which a creditor can petition for bankruptcy from AU$2,000 dollars to 10,000 [about US$1,683-$8,416];
  • 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 7 to 28 days; and
  • increasing the income, asset, and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements. (Id.)

Penalties for some offenses, especially fraud, are increased under the bill, not only to reflect the seriousness of certain types of unlawful conduct, but also to ensure that the penalties conform to similar offenses in other national, state, and territory legislation. The bill also enhances the inspector-general's powers to investigate possible violations. (Id.) The text of the draft bill will remain open for public comment until September 14, 2009. (Bankruptcy Legislation Amendment Bill 2009 – Exposure Draft, Australian Government Attorney-General's Department website, http://www.ag.gov.au/www/agd/agd.nsf/Page/Publications_BankruptcyLegisla
tionAmendmentBill2009-ExposureDraft
(last visited Aug. 31, 2009).)

Author: Wendy Zeldin More by this author
Topic: Civil code More on this topic
Jurisdiction: Australia More about this jurisdiction

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Last updated: 09/03/2009