Attorney General’s Department Personal insolvency Discussion paper

The inappropriately low existing forced bankruptcy threshold results in bankruptcy proceedings being used to aggressively pursue people for very small amounts, in lieu of collection options that are less stressful, humiliating and expensive for the debtor.  This submission, endorsed by 12 consumer groups, argues that:

• The bankruptcy threshold should be $50,000
• Bankruptcy notices should allow a 60 day response period
• Listings on the NPII should align with credit reporting obligations (that is, removal 2 years after the bankruptcy is completed)
• While we support the debt agreement proposals in this paper, there is a broader discussion needed around additional personal insolvency options including a No Asset Procedure.