- By Insights@Blackwall
- Posted October 19, 2017
With none of the fanfare associated with other recent insolvency reforms, the Federal Government today introduced amendments to the Bankruptcy Act to reduce the standard period of a bankruptcy from three years to one.
The reforms were first contemplated in late 2015 in the Government’s National Science and Innovation Agenda but not much had been heard since.
A reading of the draft legislation (the Bankruptcy Amendment (Enterprise Incentives) Bill 2017) reveals that when it comes into effect six months after royal assent, existing bankruptcies in excess of three years will automatically be discharged.
Other restrictions on bankrupts, such as travel restrictions, the prohibition on acting as company directors and disclosure obligations on credit applications are also affected. However, the trustee will retain the right to extend a bankruptcy to five or eight years and notwithstanding the early “one-year” discharge, bankrupts will be required to continue any income contributions for three years.
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