what’s new with Bankruptcy law changes 2009

The key plank of the reforms is raising the minimum debt required to trigger bankruptcy from $2,000 to $10,000.

1966 was  the year the bankruptcy laws were introduced. At that time, someone owed money could begin bankruptcy proceedings over a debt of $500 or more

"The Government has basically said this is to protect the battlers with their credit card debts from the big bad banks, but we're worried about the impact on small business."

 

He gives the example of a tradesperson who has done $7,000 or $8,000 worth of work for a private individual, only to find the customer has not paid up.

"That is a big financial impact on a small business and to restrict their recovery option because it falls below that $10,000 threshold is an area of concern. The small business that might be caught with a string of debts below $10,000 is an even bigger concern."

The attorney general says the act needs refreshing because most bankruptcies now relate to consumer debt involving people with few assets and little income.As the law currently stands, action to recover money owed can begin at $2,000 for both corporate and personal debt. The Government wants to lift that threshold to $10,000 but only for individuals.

According to Government documents, the number of personal insolvencies climbed 11% in 2008-0 to 36,479.

 

Consumer groups say using bankruptcy for debts less than $10,000 is unnecessarily harsh.

The Government's promising a relatively short wait to see how it all turns out, with the legislation expected to be ready for parliament before the end of the year.

LINKS:

1. Bankruptcy Forms for the Federal Magistrates Court of Australia

   Bankruptcy Links. ... Bankruptcy Forms.

   www.fmc.gov.au/forms/html/bankruptcy.html - 35k - Cached - 1 Jul 2009

2. ITSA

   bankruptcies, insolvency proceedings, and administrations made under the Bankruptcy Act 1966.

   www.itsa.gov.au/ - 89k - Cached - 9 Sep 2009

 

Bankruptcy Forms

Form 2: Application,
Form 3: Interim Application,
Form 4: Notice of Appearance,
Form 5: Notice Stating Grounds of Opposition to Application, Interim Application or Petition,
Form 6: Creditor's Petition,
Form 7: Sequestration Order,
Affidavits

Note: If for any reason you can not access these forms, please call or visit the Court. Click here for contact details.

The following is a list of forms located on the Federal Court of Australia web site that can be used in the Federal Magistrates Court of Australia. These forms are all MS Word documents.

Form 1: Title.
Form 8: Referral of debtor's petition.
Form 9: Summons for examination.
Form 10: Application for summons to examine relevant person or examinable person.
Form 11: Notice to creditors of annulment application.
Form 12: Notice to creditors of application for review of Registrar's decision to make sequestration order.
Form 13: Notice to creditors.
Form 14: Applicant creditor's petition for administration of deceased person's estate.
Form 15: Administrator's petition
Form 16: Arrest warrant.
Form 17: Apprehension warrant.

 

ITSA
The Insolvency and Trustee Service Australia is the government agency responsible for the administration and regulation of the personal insolvency system in Australia. Our purpose is to provide a personal insolvency system that produces equitable outcomes for debtors and creditors, enjoys public confidence and minimises the impact of financial failure on the community.

http://www.itsa.gov.au/