Following on from last year’s legislative reforms to the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018, a number of changes have recently been introduced to debt agreements.
Debt agreements were introduced as an alternative to bankruptcy and can be a flexible way to come to an arrangement to settle debts without the additional requirements and formalities associated with bankruptcy. The legislative changes are set to provide greater protection for financially vulnerable people who are entering into legally binding debt agreements that they perhaps cannot afford.
The main changes include:
Limiting the length of a debt agreement;
Eligibility requirements to enter into a debt agreement;
Increased investigative powers of the Inspector-General to address misconduct with respect to debt agreements and debt agreement administrators;
Use of a registered debt administrator or registered trustee to administer a debt agreement (cannot self-administer);
Increased protections against debt agreements that cause financial hardship.
The changes came into effect from 27 June 2019. People currently in debt agreements will not be affected by the changes.
Cove Legal provide specialist advice to clients facing possible insolvency outcomes or facing actual or threatened ATO debt action. If you are attempting to address director personal liability issues, director penalty notices, garnishee orders, winding up applications, statutory demands or need advice on an insolvency situation generally, speak to us today.
Roger Blow, Principal, P: +61 8 6381 0326 or E: firstname.lastname@example.org
This publication is not intended to provide and does not provide legal advice. You should seek professional legal advice relating to your specific situation(s) before taking any action based upon its contents.