Legislation designed to modernize personal insolvency laws has been introduced.
The amendments to the bankruptcy laws recognize that the majority of bankruptcies relate to consumer debts, and involve people with few assets and little income.
Legislation designed to modernize personal insolvency laws has been introduced.
The amendments to the bankruptcy laws recognize that the majority of bankruptcies relate to consumer debts, and involve people with few assets and little income.
Personal insolvency rarely involves "unscrupulous debtors trying to avoid paying their debts".
The amendments are a bid to give those in financial distress a realistic opportunity to consider their options, reorganise their affairs and avoid bankruptcy.
In the past year there was an 11 per cent increase in bankruptcies in Australia. The 2008-09 financial year saw the highest ever level of personal insolvency activity. A vast majority of those bankruptcies involved consumer debts.
The new bill increases the current minimum amount to recover debts via bankruptcy from $2,000 to $10,000. Last year, just 20 per cent of bankruptcies related to debts between $2,000 and $10,000.
The bill also provides for a 20 per cent increase in the income threshold for debt agreements. The increase will make debt agreements more widely available.
The bill also includes provisions related to offenses. The amendments will help ensure any criminal activity by bankrupts is dealt with appropriately.
The amendments will also help to highlight the different treatment for bankrupts who engage in criminal activity compared with those who are just unfortunate.