The Attorney-General has responsibility for bankruptcy policy, the Bankruptcy Act 1966 and the Australian Financial Security Authority.
The Bankruptcy Act and associated legislation regulate Australia's personal insolvency system and provides a framework to allow people in severe financial stress to discharge unmanageable debts while providing for the realisation of a debtor's available assets for distribution to affected creditors.
Coronavirus and changes to bankruptcy laws (COVID-19)
On 24 March 2020, the Australian Government made temporary changes to bankruptcy laws as part of its economic response to the Coronavirus (COVID-19) pandemic. The changes helped Australians facing financial distress by reducing the threat of people being forced into bankruptcy during these difficult times.
The temporary changes increased the:
- level of debt required before a creditor can make someone bankrupt from $5000 to $20,000
- timeframe for a debtor to respond to a bankruptcy notice from 21 days to 6 months
- temporary debt protection period from 21 days to 6 months.
The temporary bankruptcy changes ceased at the end of 31 December 2020.
More information about the Australian Government's economic response to the Coronavirus (COVID-19) pandemic is available on the Treasury website.
On 1 January 2021, the minimum amount of money for which a creditor can make someone bankrupt changed to $10,000.
The bankruptcy threshold of $10,000 applies to bankruptcy notices issued, or creditors’ petitions presented on, or after, 1 January 2021.
Australian Financial Security Authority
The administration and regulation of Australia's bankruptcy system is the responsibility of the Australian Financial Security Authority (AFSA).
The AFSA website has further information about bankruptcy, including:
- what to do about unmanageable personal debts
- what to do if you are owed money by a person
- how to be a trustee or administrator
- complaints processes
- personal insolvency in the context of Coronavirus.