Bankruptcy laws reformed to deal with rising debt

The Senate has passed new reforms to the bankruptcy laws as the federal government looks to deal with rising amounts of consumer debt.

Under Labor’s amended draft legislation, the minimum amount on which a creditor can petition for bankruptcy has gone up from $2,000 to $5,000.

The reforms have also sought to ensure that the value of bankrupt estates are not unnecessarily diminished by fees charged for their administration.

Labor’s changes come as the government recorded an 11 per cent increase in personal bankruptcies in the last financial year. Rising debt problems have prompted many Australians to compare debit cards in search of safer spending options.

Commenting on the legislation, Labor parliamentary secretary Ursula Stephens said: ’’(It will) provide debtors with overwhelming debts a realistic opportunity to obtain advice and consider all options before contemplating bankruptcy."

Earlier this week, a survey by wedding expert Anne Mihelakos of found that the rising cost of getting married is leaving many newlyweds in huge amounts of debt.

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