BANKRUPTCY

 

BANKRUPTCY

What’s changed?

Changes take effect from
25 March 2020 and expire on 25 September 2020.

This page last updated on 27/04/20

  • The minimum amount to apply for a bankruptcy notice (forced bankruptcy) has been increased from $5,000 to $20,000.

  • The time for a debtor to respond to a bankruptcy notice has been extended from 21 days to six months.

  • Temporary Debt Protection (the re-named Declaration of Intent process) will be extended from 21 days to six months.

  • COVID-19 supplement payments may be claimable in bankruptcy by the Trustee if paid before bankruptcy and they remain in a person’s account after becoming bankrupt.

  • Economic support payments are not claimable at any time. 

BANKRUPTCY

What’s changed?

Changes take effect from
25 March 2020 and expire on 25 September 2020.

This page last updated on 27/04/20

  • The minimum amount to apply for a bankruptcy notice (forced bankruptcy) has been increased from $5,000 to $20,000.

  • The time for a debtor to respond to a bankruptcy notice has been extended from 21 days to six months.

  • Temporary Debt Protection (the re-named Declaration of Intent process) will be extended from 21 days to six months.

  • COVID-19 supplement payments may be claimable in bankruptcy by the Trustee if paid before bankruptcy and they remain in a person’s account after becoming bankrupt.

  • Economic support payments are not claimable at any time. 

BANKRUPTCY

What’s changed?

From 25 March 2020 to 31 December 2020 there were a number of temporary measures in place to protect people from being forced into bankruptcy.  These measures ended 1 January 2021.

This page last updated on 20/01/2021

  • The bankruptcy threshold had been temporarily lifted from $5,000 to $20,000 on 24 March 2020.  However, a new permanent threshold of $10,000 came into effect 1 January 2021.  This means, from 1 January 2021, a debtor cannot be issued with a Bankruptcy Notice or forced into bankruptcy by their creditors if the debt owed is less than $10,000.

  • If you are issued with a Bankruptcy Notice (for a debt of more than $10,000) on or after 1 January 2021 then the time you have to respond to the notice has reverted to 21 days.

  • If you apply for Temporary Debt Protection on or after 1 January 2021 the protection period has reverted to 21 days.

 

TEMPORARY DEBT PROTECTION

What’s changed?

COVID 19 changes:  From 25 March 2020 to 31 December 2020 there were a number of temporary measures in place including an increase to a term of 6 months for Temporary Debt Protections.  These measures ended on 1 January 2021.

This page last updated on 20/01/2021

Originally scheduled to end late September, the Government extended the 6 month term for Temporary Debt Protections (TDP) until 31 December 2020.  From 1 January 2021 a debtor can apply for a TDP but the protection period they will be given has reverted to 21 days.

Disclaimer: The information on this website is for financial counsellors only. It is general information only. Financial counsellors must still tailor advice to their client’s individual circumstances. 

Copyright © 2020 Financial Counselling Australia. All rights reserved.​

FCA sincerely thanks Kat Lane. Liz Minter and Melinda Rene for their outstanding work in putting this site together.

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