Bankruptcy & Insolvency threat – Temporary reprieve

To assist financially stressed businesses, the government will provide temporary increases (for 6 months) in thresholds related to bankruptcy and insolvency provisions:

  • Increase in the threshold required for a creditor to issue a statutory demand from $2,000 to $20,000,
  • Increase in response time for a statutory demand from 21 days to 6 months,
  • Increase in the threshold required for a creditor to initiate bankruptcy proceedings from $5,000 to $20,000,
  • Increase in response time to a bankruptcy notice from 21 days to 6 months,
  • Where intention to voluntarily enter bankruptcy has been notified, bar to creditors action extended from 21 days to 6 months,
  • Temporary relief from director’s personal liability for insolvent trading, and
  • Temporary power for Treasurer to relieve ASIC requirements.

These temporary increases should relieve financially stressed businesses from the fear of bankruptcy during this time.

Advice
If you need advice on the tax changes, you can contact Noel May or Amanda Klye of May Klye & Associates on (03) 9585 7555 or enquiries@mktax.com.au.

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