The bankruptcy system and the impacts of coronavirus

This information was authored by the Attorney‑General’s Department. The policy functions transferred to the Treasury in May 2025.

Consultation period: 13 January to 12 February 2021

The Australian Government invited submissions on possible changes to the bankruptcy system to inform the Australian Government's ongoing response to address the impacts of coronavirus (COVID-19), between 13 January and 12 February 2021.

Background

The Bankruptcy Act 1966 regulates Australia's personal insolvency system. It creates a framework to allow people in severe financial stress to discharge unmanageable debts while providing for the realisation of a debtor's available assets for distribution to affected creditors.

The coronavirus pandemic has had wide reaching personal, employment and economic impacts across Australian communities, businesses, and industry sectors. The Australian Government made significant temporary amendments to the Bankruptcy Act and Regulations as part of the Coronavirus Economic Response Package in March 2020.

This discussion paper provided an overview of four elements of the Bankruptcy Act to guide stakeholder consideration:

1. the default period of bankruptcy

2. debt agreements

3. personal insolvency agreements

4. offence provisions.

Discussion questions were included as guidance. They were not intended to limit the scope of responses.

We also welcomed views on any other areas that stakeholders consider may address the impact of coronavirus, including the impact that it has had on unincorporated businesses such as sole traders and partnerships.

Download the discussion paper

• Discussion paper [PDF 276 KB Discussion paper | DOCX 97 KB Discussion paper]

We are seeking stakeholder submissions on possible changes to the bankruptcy system to inform the government’s ongoing response to address the impacts of coronavirus (COVID-19).