Bankruptcy amendments introduced

29 October 2009

The Attorney-General has stated that the Bankruptcy Legislation Amendment Bill 2009 will implement "significant reforms" to Australia’s personal insolvency laws and has given assurances that the proposed legislation is the result of extensive public consultation following the release of an Exposure Draft in August.

The objects of the Bill are:

to provide a more streamlined process for fixing trustee remuneration and a more transparent process for reviewing that remuneration;
to strengthen the penalties for some offences and ensure these are in line with the penalties for other similar offences;
to remove the outdated concept of Bankruptcy Districts in order to provide more flexibility in personal insolvency administration;
to increase the minimum debt for a creditor’s petition to reflect changes in the economic environment;
to increase the stay period that follows a declaration of intent to file a debtor’s petition to allow debtors to better assess their options; and
to increase the debt, income and asset tests thresholds for debt agreements to ensure the thresholds keep pace with increasing wages and the increasing availability of credit.

The Bill covers three main reform proposals.

Trustee’s remuneration – "to provide a more streamlined process for fixing trustee remuneration and a more transparent process for reviewing that remuneration";
Penalties - “to strengthen the penalties for some offences and ensure these are in line with the penalties for other similar offences;
Substantive consumer reforms - “to increase the minimum debt for a creditor’s petition to $10k to reflect changes in the economic environment”.

Mullins Lawyers will monitor the progress of the Bill.

For further information, please contact Chris Hargreaves:

Chris Hargreaves | Associate
Mullins Lawyers
t +61 7 3224 0232
f +61 7 3224 0230
chargreaves@mullinslaw.com.au