Government seeks to reform bankruptcy laws

Attorney-General Mark Dreyfus says bankruptcy laws should serve debtors, while protecting creditors. (Joel Carrett/AAP PHOTOS)

The time allowed for a debtor to respond to a bankruptcy notice could be raised under reforms being considered by the federal government.

Attorney-General Mark Dreyfus is seeking to overhaul the Bankruptcy Act, releasing a discussion paper outlining a number of proposals.

Two possible changes include increasing the bankruptcy threshold value from $10,000 to $20,000 and extending the period for a debtor to respond to a bankruptcy notice from 21 to 28 days.

The threshold value was temporarily lifted to $20,000 as a safety net during the pandemic, but the measure ended in December 2020.

However, the government has been advised locking in the $20,000 threshold will address concerns about the use of bankruptcy proceedings to pursue small debts, without reducing the general availability of credit in the economy.

As well, Mr Dreyfus' department has flagged a reduction in the period of time for which a discharged bankrupt is recorded on the National Personal Insolvency Index.

And the laws could be amended so an "act of bankruptcy" is not taken to have occurred where a debtor submits a debt agreement proposal to the Official Receiver, or where a debt agreement proposal is accepted by creditors.

"The Australian government is committed to an effective bankruptcy system that serves debtors while also protecting the rights of creditors," Mr Dreyfus said.

Submissions on the personal insolvency discussion paper close on September 29.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store