03/11/09 Article 0903 - Debt Recovery
Bankruptcy Legislation Amendment Bill 2009 (Exposure Draft)
Further to our recent update, there are some more proposed changes to the Bankruptcy Laws that will impact on those trying to recover outstanding debts. I note a few of these as follows:
- The Bill has a number of objectives. One of the most important ones is to increase the minimum debt for a creditor’s petition from $2,000 to $10,000.
- If the debtor gives a notice to file a debtor’s petition, there is generally a stay on creditors taking action. This stay would be extended from seven to 28 days.
- The draft also proposes an increase in the debt income and assets thresholds for eligibility for debt agreements. The present thresholds are: after tax income of less than $62,735.40; unsecured debts, and assets, of less than $86,647.20. These thresholds were last revised in 2002 with the aim of making debt agreements more widely available. The reforms will entail an increase in these limits of 20% each.
- The exposure draft contains quite a deal of material about the remuneration of trustees in bankruptcy. The overall purpose of the amendments relating to remuneration of trustees is to provide a clearer regime for setting and reviewing remuneration. In particular, they provide a more accessible and streamlined process for challenging the trustee’s remuneration claim. The amendments reinforce the principle that creditors have oversight of a trustee’s administration of a bankrupt estate and should be required to approve claims for remuneration. This ensures creditors, who are the beneficiaries, can be satisfied that the remuneration is reasonable and reflects the value added to the estate by the trustee’s work.
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