Did you know that because of the COVID19/Coronavirus The Federal government has taken urgent steps to assist construction companies and other persons from insolvency?
The federal government has taken the action to protect construction companies and other people at risk of insolvency given the current crisis.
The Federal Government is temporarily increasing the current minimum threshold for creditors issuing a statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000 and for bankruptcy notices under the Bankruptcy Act 1966 , $5000 to 20,000.
This will apply for six months.
The statutory time frame for a company to respond to a statutory demand will be extended temporarily from 21 days to six months. This will apply for six months.
The time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months. The extension will give a debtor more time to consider repayment arrangements before they could be forced into bankruptcy. This will apply for six months.
When a debtor declares an intention to enter voluntary bankruptcy by making a declaration of intention to present a debtor’s petition there is a period of protection when unsecured creditors cannot take further action to recover debts.
This period will be temporarily extended from 21 days to six months.
This will give debtors more time to consider the options that are best for them. This will apply for six months.
Important note
Remember debt collection is governed by state, and so until a state government intervenes, creditors will still have the right to enforce debt against companies or individuals through the courts.
This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with John Merlo Law at QLD Law Group. I look forward to being of assistance.
