Bankruptcy threshold changed to $10,000 effective 1 January 2021
- Published 21.12.2020
The Attorney-General Christian Porter today announced that Australia’s personal bankruptcy threshold for the issue of bankruptcy notices will change to $10,000 from 1 January 2021. The time for compliance with bankruptcy notices will revert back to 21 days.
The threshold for issuing a bankruptcy notice was temporarily increased from $5,000 to $20,000 in March 2020 in response to COVID-19 with the time for compliance extended to six months. These changes were due to expire on 31 December 2020.
Trade creditors who have defaulting debtors under $10,000 will need to continue to use alternate judgment enforcement methods such as sheriff asset seizures, garnishee orders and debtor examinations to pressure judgment debtors for payment.
TurksLegal is a leading commercial law firm with teams in Sydney, Melbourne, Brisbane and Newcastle. Our specialist Trade Credit team is highly experienced in legal collections, terms of trade, post insolvency asset recovery and defending liquidators' unfair preference claims. If you have any queries, please contact Daniel Turk.