The financial impact of the COVID-19 (coronavirus) on individuals and businesses can be seen across Australia and the rest of the world. On March 25th 2020 the new changes to the bankruptcy laws by the Australian government came into effect to support individuals and businesses. These temporary debt relief measures included:

6 month temporary debt protection

The period of temporary debt protection for those in financial difficulty has changed from 21 days to 6 months. This will allow you to be protected from unsecured creditors for a 6 month period and allow you time to think of your next course of action. Some of these options could include looking at ‘safe harbour’ protections to restructure your business, speaking to a professional financial adviser, or considering formal solvency options.

Changes to bankruptcy notes

The debt threshold required for creditors to apply for a bankruptcy notice against a debtor has increased from $5,000 to $20,000. This will be applicable for the next 6 months. The time for the debtor to respond to bankruptcy notices has also been increased from 21 days to 6 months. This will provide more time for the debtor to consider repayment arrangements before being forced into bankruptcy.

If a bankruptcy notice was issued before March 25th 2020 then the 6 month period will not apply and the debtor has to comply with the 21 days period.

If you are experiencing financial distress, please contact Australian Bankruptcy Services to speak to one of our friendly and professional consultants today. With experience in helping thousands of Australians overcome debt problems, we know we can help you. Our lines are open 24 hours a day, so please call when it is convenient to you on 1800 462 767.