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Insolvency law – temporary changes announced March 2020

The Federal Government recently announced temporary
changes to both corporate and personal insolvency law, to try to alleviate some
of the adverse impact on business, of COVID-19.  In particular the temporary
(i.e. for the next 6 months) measures include:

  • increasing the debt threshold (minimum amount owing) upon which creditors can issue a Statutory Demand to corporate debtors (increasing from $2,000 to $20,000)
  • increasing the debt threshold (minimum amount owing) upon which creditors can commence bankruptcy proceedings against individual debtors (increasing from $5,000 to $20,000)
  • increasing the time period for responses by debtors to Statutory Demands (corporate debts) and Bankruptcy Notices (personal debts) – increasing from 21 days to six months
  • temporary relief, in the absence of fraudulent conduct, for directors from the insolvent trading (personal liability) provisions of the Corporations Act 2001, for the next 6 months

Contact us at mail@fergusons.com.au or phone (08) 8359 2550 should you wish to discuss

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