Australia is poised to take a step into a new future with the proposed changes to the Bankruptcy Act, which will reduce the restriction period from three to one year, according to Bankruptcy Experts, a firm that offers bankruptcy advice to affected clients.
Financial failure until now has been rather strictly punished in Australia, but things are about to change for the better. A cultural shift in thinking, the proposed Act would reduce the time served as a bankrupt to just one year, and will have far reaching implications for businesses, especially small-business owners and entrepreneurs. The new Act will ensure that they are not “aced out” of the game for taking risks and failing.
Apart from the reduced timeline, the new Act, introduced into the parliament on 19 October 2017, includes several other goodies. The reduced timeframe allows affected parties to apply for credit after the period without disclosing their status as a bankrupt. They will be allowed to travel overseas without seeking prior permission, and can serve as a company director. As for income contributions, the Act still requires the obligation to continue for two years after release from bankruptcy. Non-compliance however will still beget bankruptcy for up to five to eight years.
“The new Act may not affect those who are currently bankrupt as it is not retrospective. So those whose bankruptcies have been extended to five or eight years will continue to discharge their obligations,” says Charles Bosse of Bankruptcy Experts.
According to Bosse’s form, the new Act will reduce the suffering of debt ridden individuals. More people will be encouraged to file for bankruptcy rather than stage a struggle to survive with minimal assets, or entering into debt agreements to settle their debts.