Part X of the Bankruptcy Act allows individuals to propose an alternative to bankruptcy (a ‘Personal Insolvency Agreement’).  Whilst it is used infrequently, the process can result in benefits to the individual debtor and a higher return to creditors than bankruptcy.

For individuals, when debt becomes unmanageable, bankruptcy is not the only option available to gain control of the situation.

The Personal Property Securities Act contains penalties for misuse of the register.  The Government regulator, AFSA, are now taking action to maintain the register’s integrity.

The Personal Property Securities Register (“PPSR”) is a publicly-accessible online register, containing records of prescribed personal property and claimed security interests in personal property.  However, allowing such a large pool of entities to register on the PPSR opens up a greater possibility for misuse.

The Federal Court has granted leave to a Trustee in Bankruptcy to disclaim a litigation funding contract – which provided the funder with a premium of 80-85% plus reimbursements of its costs.

Not all contracts that have been entered into by a bankrupt are going to be performed during the bankruptcy.  Some existing contracts can be ‘disclaimed’, freeing the Trustee in Bankruptcy from taking any further action with regard to the contract’s performance.

The new class of registered liquidators (the SBRP) is explained.  But there has been a disappointing uptake of the new debt restructuring process – only half a percent (0.5%) have used the new process.

In response to the COVID-19 pandemic, the Australian Government introduced insolvency reforms for small businesses, which came into effect on 1 January 2021.

Many business owners are still unaware of the benefits of PPSR registration.  For a small cost and little effort, suppliers can get the benefits of ‘security’ and minimise their exposure to bad debts.

Use it or lose it – how registering on the PPSR is more important than ever

JobKeeper and the ‘Code of Conduct for Commercial Rent Relief’ both ended in March 2021.  Now will be a crisis time for many businesses.

In October 2020, Federal Treasurer Josh Frydenberg stated:

The ATO has been very patient during the COVID-19 pandemic – but that is about to change!

During the COVID-19 pandemic, the ATO has been patient with individuals and small businesses – allowing them plenty of opportunities to get their tax affairs in order.

From July 2021, changes to comprehensive credit report legislation come into effect. 

Consumers will have greater access to their credit information.  Lenders will be restricted in disclosing financial hardship information in certain circumstances.