A New Minimum Statutory Threshold: Bankruptcy
Published Tuesday 5 January 2021
2020 forced us all to leap into a period of evolution and change.
As part of that change, temporary measures were implemented by the government through various Coronavirus Economic Response Packages to ensure that we had time to adapt to our new norm. Whilst many of those temporary measures have now ceased, a permanent reform to the minimum statutory threshold debt for bankruptcy has been put in place.
Prior to the implementation of the various Coronavirus Economic Response Packages, the minimum statutory threshold debt required for a creditor to bankrupt an individual was $5,000.00. During the relief measures, this increased to $20,000.00. Settling at the midway point, a permanent reform has been introduced (effective as of 1 January 2021) setting the minimum statutory threshold at $10,000.00.
A further temporary measure stemming from the Coronavirus Economic Response Packages was the increase in time for an individual to respond or comply with a bankruptcy notice. Previously set at 21 days, the response time increased to six months. This temporary relief measure has now ceased. That means, you again only have 21 days to respond to a bankruptcy notice.
Whether you need further advice on issuing a bankruptcy notice, or are on the receiving end of one, our knowledgeable team can assist.