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Consumer advocates object to new fee for entering bankruptcy

Consumer advocates and financial counselling are opposed to the new plan to charge Australians filing for bankruptcy. The Australian Financial Security Authority (ASFA) has proposed to impose a new fee of $120 from 1 April 2014.

Financial Counselling Australia, Consumer Action Law Centre, Consumer Credit Legal Centre, and Footscray Community Legal Centre, will be seeking an urgent meeting with the Attorney-General, Senator Brandis to discuss this issue in the hopes the Government will intervene before the fee is implemented.  Advocates will also be putting in a written submission about the fee.

‘People considering bankruptcy are at the end of their tether,’ said Fiona Guthrie, Executive Director of Financial Counselling Australia. ‘They simply won’t be able to afford the fee, which means either that charities end up having to pay for them, or that people will remain trapped in poverty, fighting off calls from creditors and debt collectors.

‘In New South Wales, people who can’t afford bankruptcy will face the real possibility of having personal possessions seized through court enforcement processes—possessions that would be protected in bankruptcy,’ said Ms Guthrie.

For more information see the Media Release by the Consumer Action Law Centre

If you would like to put in your own submission, the government is taking comments until 28 February 2014: See Cost_Recovery_Impact_Statement