Attorney-General Christian Porter today announced that Australia’s personal bankruptcy threshold will be set at $10,000.
The threshold was temporarily lifted from $5,000 to $20,000 on March 24 of this year in response to the COVID-19 pandemic. The new threshold of $10,000 will be permanent, and comes into effect on January 1, 2021, when the temporary threshold expires.
“The new permanent $10,000 threshold will ensure that Australians in financial difficulty are not made bankrupt over relatively small amounts of debt,” Attorney-General Christian Porter said.
“This also accounts for the changing value of money since the $5000 threshold was last increased in 2010, as well as changes to debt levels since that time.”
The change to the bankruptcy threshold has been informed by consultation with stakeholders, including insolvency practitioner industry and member associations and consumer advocates.
The temporary bankruptcy measures that commenced on 24 March 2020 also increased:
- the statutory period for compliance with a bankruptcy notice from 21 days to six months, and
- the default period in which a debtor is protected from enforcement action by a creditor following presentation of a declaration of intention to present a debtor’s petition from 21 days to six months.
These temporary 6 month periods are also scheduled to cease on 31 December 2020 and will revert back to 21 days from 1 January 2021.
Authorised by Christian Porter, Liberal Party of Australia, Parliament House, Canberra.
Link to the media release can be found here.
Interested in learning more on Insolvency & Reconstruction?
Click our recent articles below to find out more: