Help for battlers to avoid bankruptcy

Battlers who struggle to make ends meet after losing their jobs will be saved the humiliation of forced bankruptcy.

New laws to be announced by the Federal Government will focus on low income workers who struggle with mortgage repayments and credit card debts.

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.

Published on August 8-th, 2009 in Financial Planning
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.