Battlers who struggle to make ends meet after losing their jobs will be saved the humiliation of forced bankruptcy.
The attorney General has drawn up plans to assist people who have fallen on hard times but will increase penalties for fraud by corrupt debtors.
Under the attorney general's revised laws the minimum debt at which a creditor could petition for bankruptcy would rise from $2,000 to $10,000. The period between the application for a bankruptcy petition and the start of action to recover debts would be increased from seven days to 28 days.
This means that individual debtors would have more time to seek help and advice required to negotiate a repayment program thereby avoiding bankruptcy.
Income, asset and debt thresholds will be changed to allow more people to enter into voluntary debt agreements with creditors.
The maximum jail term for fraud will be increased from three years to five years in a move to crack down on bankrupts who hide assets and there will also be stronger powers to investigate those cases.