Bankruptcy minimum raised from $2,000 to $5,000

29-November-2010 Fraud and Insolvency Bankruptcy By Mark Streeter

Higher minimum debt for bankrupt individuals will reduce bankrupcty notices

On 24 June 2010 the Federal Parliament passed amendments to the Bankruptcy Act 1966.

There were a number of technical “restructuring” type changes to the Bankruptcy Act which included a restructure of the organisation of the “Districts” for Bankruptcy, a streamlined process for remuneration of trustees and increase in penalties for non-complying individuals.

One of the changes was an increase of the minimum debt amount a creditor may issue a bankruptcy notice from $2,000.00 up to $5,000.00. Although the initial Bill proposed the amount to be increased to $10,000.00, following the Senate Legal and Constitutional Affairs Legislation Committee report in February 2010 it was agreed to amend the proposed amount to $5,000.00.

The amended provisions took effect from 11 August 2010.

Bankruptcy Notices are often used as an enforcement mechanism by debt collection and debt recovery firms. Many more Bankruptcy Notices are issued than proceedings actually commenced (or sequestration orders made).

In the financial year 2008/2009 there were 1,953 sequestration (Bankruptcy) orders made across Australia. Many of these were for an amount less than $5,000.00. This means many orders would not have been made under the new proposed minimum of $5,000.00.
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Written by Mark Streeter

Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!

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