Further to our recent alert on A New Era of Insolvency Law, the Commonwealth Attorney-General, Christian Porter, has announced a permanent increase to the judgment debt threshold for bankruptcy notices.
From 1 January 2021, Australia’s bankruptcy notice threshold will be set at $10,000. This is double the previous minimum of $5,000, which applied before 25 March 2020 (it was temporarily $20,000 from 26 March to 31 December 2020 due to COVID-19). Consequently, creditors will only be entitled to issue a bankruptcy notice to their debtors if they have judgment against the debtor for $10,000 or more.
This increase will mean creditors who have judgment against an individual worth between $5,000 and $10,000 and who may have been waiting for the pre-COVID-19 threshold of $5,000 to return on 1 January 2021 will need to explore other options to enforce payment of their judgment.
If you would like advice on how this change may affect you, then our experienced Litigation + Dispute Resolution team can help.
A New Era of Insolvency Law