Insolvency Relief Laws Extended to 31 December
On 7 September 2020, the Federal Government announced that they will extend the Insolvency Relief Laws, which were due to end on 24 September 2020 to at least 31 December 2020 in a bid to prevent further job losses.
In short, the following to temporarily assist those who owe debts, but not those trying to collect money validly earned. As such good businesses are affected on both sides of the fence. The continuing changes include:
- Statutory Demands can only be issued for debts in excess of $20,000 (up from $2,000). This is a key step for a creditor who is owed money by a company to put the other company into liquidation.
- The company who receives a Statutory Demand has six (6) months (up from 21 days) to comply, before the creditor can apply to liquidate the other company.
- A Bankruptcy Notice can only be issued for debts in excess of $20,000 (up from $5,000). This is a key step for a creditor who is owed money by an individual to put the individual into bankruptcy.
- The person who receives the Bankruptcy Notice has 6 months (up from 21 days) to comply, before the creditor can apply to bankrupt the person.
- Company directors stay temporarily relieved of their duty to prevent insolvent trading for debts incurred in the company’s usual course of business (unless there is dishonesty or fraud).
Despite the measures we have been successful in assisting a number of our commercial clients collect their debts during this difficult time. If you require assistance collecting debt owed to you, do not hesitate to contact our office for a complimentary initial consultation. We partner with our commercial clients to understand your business and obtain the best possible outcomes for you.
For further information, please contact Roser Lawyers.