In case you thought there were not enough changes to Australian insolvency laws in 2020, a further reform has just been announced!
From 1 January 2021, the minimum statutory threshold debt required for a creditor to bankrupt an individual will increase to $10,000.
Prior to the temporary changes ushered in by the Coronavirus Economic Response Package Omnibus Act 2020 (CERPO), the minimum debt required prior to enforcement by way of a bankruptcy notice was $5,000. However, during the period in which CERPO was effective, which was extended to 31 December 2020, the threshold increased from $5,000 to $20,000.
This ‘CERPO change” was only ever temporary however and, presumably in an effort to assist financially distressed individuals in the wake of the pandemic and after many of the protections afforded by the temporary Covid-19 relief measures are lifted, this new increase to $10,000 is permanent.
The other temporary change under CERPO was the increase of time (from 21 days to six months) for an individual to respond or otherwise comply with the bankruptcy notice. There has been no permanent change to this timeframe and therefore, from 1 January 2021, the 21 day period will be applicable.
For more information reach out to any of our experienced team members at Cronin Miller Litigation Lawyers.
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