The Bankruptcy Amendment (Enterprise Incentives) Bill 2017 was introduced into the Senate last year as part of the Government’s insolvency reform package.
The Bill will, if passed, reduce the default period of bankruptcy from three years to one year.
Other time periods associated with bankruptcy will also be reduced to one year. These include disclosure of bankrupt status when applying for credit, seeking permission for overseas travel and the attainment of certain licences and entering into certain professions.
The amendments clarify that income contribution obligations for discharged bankrupts extend for a minimum period of two years following discharge or, in the event that a bankruptcy is extended due to non-compliance, for a period of five to eight years. The amendments ensure that persons who are under an obligation to notify change in contact details continue to do so.
The amendments will apply to persons made bankrupt before the commencement of the Act.
The Senate Legal and Constitutional Affairs Legislation Committee has endorsed the passing of both the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 and the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 in its report dated 21 March 2018, subject to some recommendations.
It noted ASIC’s recommendation that subsection 201A(a) of the Corporations Act 2001 be amended to require that a person made bankrupt within the last three years cannot be included for the purpose of satisfying the minimum director requirement, which currently provides that a proprietary company have at least one director.