The latest statistics from the Australian Financial Security Authority revealed the lowest number of bankruptcies since records began in 1986. While the pandemic had brought on a recession, governments, banks, employers and even landlords provided people with some financial buffer, which at least temporarily reduced the number in dire straits.
In the September quarter, there were 2946 personal insolvencies, including 1676 bankruptcies. In October, AFSA introduced a new online application process for bankruptcy applications.
“The digital bankruptcy application asks applicants a series of questions about their circumstances and is designed to provide further information about the consequences of bankruptcy,” an AFSA spokeswoman said.
“The application process also provides guidance about the information required for each question in the bankruptcy application, to help reduce confusion.
“The aim of the online bankruptcy application is to help individuals in financial difficulty better understand the overall consequences of bankruptcy and, if they decide that bankruptcy is their best option, to apply with confidence.”
The process is considered so important it is being monitored by the behavioural economics team in the Department of Prime Minister and Cabinet. AFSA and the team have acknowledged the stress that applicants would be under, and will seek to make the process as straightforward as possible.
There may also be benefits for creditors. This month, the government lowered the minimum amount of debt able to trigger bankruptcy from $20,000 to $10,000, and reduced the time an individual has to respond to a bankruptcy notice from six months to 21 days.Jump to next article