The Australian Government has temporarily changed bankruptcy law to help protect people who are facing unmanageable debt as a result of the economic impacts of COVID-19.
If you're a sole trader, or operating a business as a partnership, you could face personal bankruptcy if you can’t pay your debts.
If you're in financial difficulty you can now apply for temporary debt protection; this prevents recovery action by unsecured creditors for six months. You can use the time to:
Seek free advice from a financial counselor.
Negotiate payment plans with creditors
Consider whether you require a formal insolvency option.
In addition, the temporary debt relief measures have increased the:
Minimum amount of debt that can trigger bankruptcy (from $5,000 to $20,000)
Time an individual has to respond to a Bankruptcy Notice (from 21 days to six months).
For the latest advice, information, copy and resources, go to https://www.ato.gov.au/
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