What is the current situation with respect to the temporary COVID-19 debt relief measures?

Temporary debt relief measures ended on 1 January 2021

As of 1 January 2021, temporary legislative changes implemented due to COVID-19 ceased, and the following changes apply for individuals and companies:

For individuals

⚖️ The minimum debt threshold for creditors to apply for a bankruptcy notice against an individual has reduced from the temporary amount of $20,000 to the new permanent amount of $10,000.

⚖️ The timeframe for a debtor to respond to a bankruptcy notice has reverted to 21 days. This means if a bankruptcy notice is issued on or after 1 January 2021, the debtor will have 21 days to respond.

⚖️ The period for temporary debt protection for debtors has reverted to 21 days.

⚖️ For more information, see the Australian Financial Security Authority.

For companies

⚖️ The minimum debt threshold for creditors to issue a statutory demand against a company has reverted to $2,000.  

⚖️ The timeframe for a debtor to respond to a statutory demand has reverted to 21 days.

This means if a statutory demand is issued on or after 1 January 2021, the debtor will have 21 days to respond.

⚖️ For more information, see Insolvency reforms to support small business.

If you receive a bankruptcy notice or statutory demand, you should seek independent legal advice or contact a financial counsellor.

Source: ACCC Debt Collection Guideline for Collectors & Creditors.