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Consumer Action Law Centre provides financial counselling assistance and legal advice to people at all stages of the insolvency process. We regularly speak to people who end up in unnecessary and costly bankruptcies that could have been avoided if better protections and a safer system existed. With a worsening economic outlook and the cost of living crisis, we are concerned more people will be railroaded into bankruptcy when they have better options to fairly resolve their debts.

The main purpose of this submission is to provide additional case studies from our direct experience assisting people within the last 12 months who were referred to us by judicial registrars at the Bankruptcy List of the Federal Court. These cases demonstrate the need for the statuory minimum threshold for creditor’s petitions to be increased to $50,000, a threshold we believe should also be subject to annual indexation at the rate of CPI. In our view, the proposed increase to $20,000 in the Paper (particularly without indexation) is far too low. As detailed in page 26-27 of the Joint Consumer Submission, financial counsellors from Consumer Action attend Bankruptcy List hearings in person in Melbourne to provide advice on the spot to unrepresented debtors about their options.

Read the full submission (PDF).