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Attorney-General, Robert McClelland has recently released details of proposed changes to existing personal bankruptcy legislation.
The changes are now available for public consultation and are intended to modernise the current legislation to better reflect what is actually happening in the community. Specifically, it is addressing the fact that we are increasingly seeing a larger number of bankruptcies in relation to consumers with a small amount of assets and low income levels. Where previously bankruptcy was more commonly associated with individuals who were often simply attempting to avoid paying their debts, bankruptcy is now being increasingly accessed by those who have simply found themselves having a hard time financially.
Some major items of the proposed changes include:
• increasing the minimum debt for which a creditor can petition for bankruptcy from $2,000 to $10,000;
• increasing the stay period from when a declaration of intent to file a debtor’s petition is filed to when a creditor may commence action to recover debts from seven to 28 days; and
• increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements.
In essence, the Bankruptcy Legislation Amendments Bill 2009 aims to promote proactive discussion, negotiation and remedies. This should see that honest debtors are given a legitimate opportunity to sit down with their creditors and make arrangements for the repayment of debts and creditors are satisfied that they will receive the monies that are due to them without the need to send excessive numbers of individuals bankrupt.
In light of that, the Bill also seeks to toughen the penalties in relation to fraud and other bankruptcy offences so that insincere parties cannot take advantage of the new conditions that are favourable for those who are actually in trouble.
The rest of the article can be found at:
http://mysmartphoneapps.blogspot.com/2009/11/consumer-bankruptcy-laws-to-change-to.html
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