The Senate Legal and Constitutional Affairs Legislation Committee has endorsed the passing of the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 in its report dated 21 March 2018.
The Bill will align the bankruptcy period in Australia with the United Kingdom. Under the Bankruptcy Act 1996, the period of bankruptcy (unless a successful objection is made) is three years. If passed, the Bill will reduce the period to one year.
Key points to note are that:
- The Bill commences six months after receiving Royal Assent
- Trustees in Bankruptcy may be placed under increased pressure to complete investigations and take action to recover assets in a short period
- The Corporations Act 2001may be amended to limit the risk to creditors arising from phoenix activity (this may include, for example, increasing the director disqualification period from five to seven years).