The banks don’t want the government to go ahead with their plans to raise the bankruptcy threshold from $2,000 to $10,000. The Australian Bankers Association claims that by raising it to $10,000 it will encourage Australians to run up bad debts.
What this change will mean is that companies that debtors owe money to will not be able to ‘chase’ their payments from the debtor until they have accumulated at least $10,000 of debt.
The proposed new law also would increase the “stay period” from 7 to 28 days, which would force creditors to wait a month before being able to take action to recover the debts owed to them.
The Australian Bankers Association has suggested to the Senate that the threshold should be set at $5,000.
The banks feel that a change of this extent will increase the amount of debtors who default on payments and enhance the mindset of debtors that a failure to pay smaller amounts is unlikely to result in bankruptcy.
If you are struggling to repay your creditors you should look into debt solutions before bankruptcy is forced upon you, or becomes your only option. The Australian Lending Centre has many preferred alternatives to bankruptcy. Three popular debt solutions to bankruptcy are: refinancing , a debt consolidation and a debt agreement.
For more information on how the Australian Lending Centre can help you service your debt problem, please call 1300 138 188 today, or simply fill in an enquiry form to your right and a debt consultant will contact you shortly.