ARTICLE · 03 MARCH 2021

One-year bankruptcy discussions

Worrells

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Bankruptcy reforms, the past, present & potential future.

AustraliaInsolvency/Bankruptcy/Re-Structuring

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POTENTIAL PIECEMEAL REFORMS WILL CONTINUE.

One-year bankruptcy is back on the table. After lapsing due to the 2019 federal election being called, the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 is once again being contemplated through stakeholder submissions the Attorney-General's office is seeking as an ongoing response to the COVID-19 impacts. No matter the industry, permanent law changes as a reaction to a temporary economic event is risky. Reform to suit the current economic environment will not necessarily mean it is good policy in time to come.

A shorter bankruptcy period is not something new. Up until 2003, bankrupts could apply for early discharge after six months. To be eligible, the bankrupt estate had no prospect of dividends, the bankrupt was not liable to pay income contributions and the bankruptcy trustee determined no possible voidable transactions would lead to a dividend to creditors. The bankrupt would be disqualified from applying if

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