The Australian Government has released an exposure draft bill for consultation on proposed personal insolvency reforms.
These reforms were first announced by Mark Dreyfus KC MP in July 2024 and include proposals to:
- increase the bankruptcy threshold from $10,000 to $20,000 and index it over time
- increase the timeframe in which a debtor may to respond to a bankruptcy notice from 21 to 28 days
- amending the Bankruptcy Act so that an ‘act of bankruptcy’ is not taken to have occurred following the proposal, or acceptance of a debt agreement.
The consultation is being led by Treasury and will remain open until 3 November 2026.
Consultation on the fourth proposed reform, which would reduce how long a person who has been discharged from bankruptcy is listed on the National Personal Insolvency Index to seven years, will occur at a later date.
The Assistant Minister for Productivity, Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP, has released a media statement announcing the commencement of consultation on the proposed reforms. Read the media statement Bankruptcy reforms to give Australians a fairer chance to start again.
Stakeholders are encouraged to review the proposed reforms and participate in the consultation process.
Further information, including the exposure draft legislation, consultation materials and details on how to make a submission, is available on the Treasury consultation website.
For enquiries about the consultation process, please contact bankruptcy@treasury.gov.au.
