The Australian Federal Government has recently announced an extension to the temporary protections afforded to insolvent individuals and businesses to 31 December 2020. The protections, which were to expire at the end of September 2020 and which have now been extended, include the following:
- Increasing the threshold at which a creditor can issue a statutory demand to $20,000 from $2,000, with 6 months to respond to the statutory demand, an increase from 21 days;
- Increasing the threshold at which a creditor can issue a bankruptcy notice to $20,000 from $5,000, with 6 months to respond to a bankruptcy notice, an increase from 21 days;
- Extending the temporary moratorium on personal liability for directors for insolvent trading. Further information on this can be found here.
The protections are part of the Government’s plan to prevent the Australian economy from falling off the proverbial cliff, which includes schemes like the JobKeeper and JobSeeker, which have also been extended at lesser amounts.
Seize the opportunity
While it is tempting to adopt the “wait-and-see” approach, the protections allow for necessary time to effect changes to your business’ finances. It is important that insolvent businesses take this once in a lifetime opportunity to re-look at their finances, have a plan in place and come out the other side prepared.
Contact Us For Assistance
We are specialist insolvency accountants that provide not only formal insolvency services like voluntary administration and bankruptcy appointments, but also assistance and advice on alternatives to bankruptcy and liquidation. These include advice on turnaround and restructuring for businesses, and assistance on negotiation of informal arrangements and settlements.
If you require assistance in restructuring your debt or business, we are able to assist. Please contact our Brisbane or Gold Coast office for a free, no-obligation consultation. Our team of accountants is led by specialists who are members of ARITA and AIIP.