What are the new 12 month bankruptcy Laws?
A new Bill has been entered into Parliament to change the term of Bankruptcy from it’s current 3 year term to a new 12 month term.
When will the new Bankruptcy laws begin?
Once the bill has been passed in parliament, which we expect to be any week now, it then needs to receive what is called “Royal Ascent” meaning they are approved by the monarch. The new laws will come into effect 6 months after receiving Royal Ascent.
What do these new laws mean for people already in Bankruptcy?
Great news! If you declared Bankrupt prior to the changes in the law and have been in Bankrupt for 12 month or more, the new term will also apply and you will be automatically released from Bankruptcy.
Why are these changes being made to the Bankruptcy term?
This is best explained by Senator James McGrath who said:
“Our current personal insolvency laws put too much focus on stigmatising and penalising failure … this reform aims to promote entrepreneurship and innovation and to reduce the stigma associated with bankruptcy. This reform is designed to foster entrepreneurial activity by reducing the negative effects that harsh bankruptcy laws may have on prospective entrepreneurs. Further a reduced bankruptcy term will decrease stigma associated with entering into bankruptcy by recognising the importance of giving bankrupts a “Fresh Start”.
Sen James McGrath.
The Senate
Will the new laws apply to me?
