The Federal Government’s proposed changes to Australia’s bankruptcy laws, purported to provide for low-income earners, may be damaging to small businesses in the long run, according to leading insolvency expert Mark Robinson.
Attorney-general Robert McClelland today released the Government’s proposed reforms to bankruptcy laws, with the aim to modernise personal insolvency arrangements by recognising that the majority of bankruptcies relate to consumer debts and involve people with relatively few assets and little income.
As part of the amendments, the Government will increase the minimum debt for which a creditor can petition for bankruptcy from $2,000 to $10,00. Robinson, president of the Insolvency Practitioners’ Association of Australia, said this could be damaging for small businesses, as it restricts their ability to recover unpaid debts.
However, McClelland said that the amendments have been designed with low-income earners in mind, and will give those in financial distress a more realistic opportunity to consider their options and reorganise their affairs.
““The Government is committed to ensuring our bankruptcy laws are able to deal with personal insolvency issues quickly and efficiently so that people can get back on their feet as soon as possible.”
For more information on the amendments, please visit www.ag.gov.au
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