Bankruptcy threshold now $10,000

We have previously written about the temporary protections the Federal Government introduced for insolvent individuals as a result of the Covid-19 pandemic. These temporary protections included:

  • An increase in the minimum amount a creditor must be owed to issue a bankruptcy notice to $20,000 from $5,000; and
  • Increasing the time frame provided to respond to a bankruptcy notice from 21 days to 6 months.

These provisions ceased operation on 31 December 2020.

As we have previously written about, creditors can also apply to Court to make a person who is unable to pay their debts bankrupt. To do this a creditor must generally have a judgment against the person for over $5,000 (subject to the changes below) and have issued a bankruptcy notice. A creditor who applies to Court in order to bankrupt someone may elect to have the Court appoint a private trustee or they can arrange for the Court to appoint the Official Trustee.

The Federal Government has announced the cessation of the temporary protections and fixed a new threshold at which a creditor can issue of bankruptcy notice. From 1 January 2021:

  • The threshold to issue a bankruptcy notice is permanently fixed at $10,000; and
  • The time allowed to respond to a bankruptcy notice is reverted to 21 days.

These amended provisions will mean that creditors are more readily able to take action via bankruptcy proceedings. However, they will also afford debtors some protection from bankruptcy proceedings for debts of less than $10,000.

How we can help

The best thing to do if you have unmanageable debts is to obtain advice and assistance about your options. You should not wait until a creditor takes action against you prior to getting advice.

This is where we can help. So, please contact us at our Brisbane or Gold Coast offices if you wish to obtain assistance. We will discuss all the options that may be available to you, including ways you can avoid bankruptcy.


We’re happy to answer any questions you may have, so please don’t hesitate to call us and schedule a consultation.



Level 12
127 Creek Street
Brisbane Qld 4000


Phone: 07 3221 0055
Fax: 07 3221 8885

Postal Address

GPO Box 691
Brisbane Qld 4001



Level 15, Corporate Centre One
2 Corporate Court
Bundall Qld 4217


Phone: 07 5630 1179
Fax: 07 3221 8885