The Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 commenced on 27 June 2019. This debt agreement law reform aims to enhance accessibility so that the debt agreement system is a fairer system for both debtors and creditors. It also aims to protect the financially vulnerable from potentially being exploited.
 
There are various features of debt agreements that will be changed, including:

• The length that a debtor can propose for a debt agreement
• The criteria to enter into a debt agreement
• The voting rules for creditors
• The registration requirements for debt agreement administrators
• The investigative and inquiry powers of the Inspector-General

 
This purpose of this legislation is to help more people avoid personal bankruptcy, whilst providing greater protection for both debtors and creditors.
 
By tightening the regulation of debt agreement regimes, this reform helps boost confidence in the industry whilst upholding professional standards. It also introduces tougher penalties for wrongdoing.
 
The debt agreement law reform also helps promote transparency between the administrator and stakeholders to ensure that the debt agreement system is accessible and equitable.
 
To stay up to date about the latest insolvency news, sign up to our newsletter. To speak to a professional insolvency specialist, please contact Debt Free Australia on our 24/7 toll-free hotline on 1800 462 767. Our toll-free hotline is open 24 hours, every day 7 days a week.
 

Here at Debt Free Australia we always try to find the least severe financial solution before we consider bankruptcy. With that philosophy in mind we offer a free financial assessment to explore possible alternatives before committing to Bankruptcy. However, if you wish to file for bankruptcy, we see it as our role to firstly educate you about the consequences. There are serious ramifications to declaring bankruptcy in Australia, and we have detailed the top 3 below.
 

1) Loss of Assets
A consequence of bankruptcy is that you may lose your assets. If you have a house or a car worth more than $7,900, it will be sold by your Trustee.
 
2) National Record
Your bankrupt status will have a permanent record on the National Personal Insolvency Index (NPII). This is managed by the Australian Financial Security Authority (AFSA).
 
3) 3 Year Minimum
The standard period of a Bankruptcy is 3 years in Australia which begins from the day your application is accepted. However, in certain circumstances, this period may be extended to 5 or 8 years. Below are three examples of reasons why your bankruptcy may be extended:

• Failing to attend a meeting of creditors
• Not disclosing an asset or liability to your Trustee
• Leaving the country without permission from your Trustee

 
If you are looking for advice personally tailored to your situation about any debt relief solutions, then please contact Debt Free Australia. DFA are passionate about helping Australians get out of debt and prepare for a better financial future. Please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.