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Insolvency – FED

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The temporary changes to insolvency laws under schedule 12 of the Coronavirus Economic Response Package Omnibus Act 2020 have been extended to end on 31 December 2020.

The temporary measure were originally set to end on 25 September 2020.

A recap of the changes are as follows:

Bankruptcy

The time for a debtor to comply with a bankruptcy was extended from 21 days to six months. The threshold for initiating bankruptcy proceedings increased from $5,000 to $20,000.

The same six month time extension applies to the time within which a debtor is protected from enforcement action by a creditor, following their presentation of a declaration of intention to present a debtor’s petition, under s 54A Bankruptcy Act.

Liquidation

The time for a debtor company to comply with a statutory demand was extended from 21 days to six months. The threshold to issue a statutory demand increased from $2,000 to $20,000.

Safe harbour

The temporary s 588GAAA ‘Safe harbour—temporary relief in response to the coronavirus’, of the Corporations Act 2001 provides that the existing civil penalties for directors failing to prevent insolvent trading under ss 588G(2) do not apply in relation to a debt incurred by a company if the debt is incurred in the ordinary course of the company’s business and until 31 December 2020.

The By Lawyers Dealing with COVID-19 legal issues commentary has been updated to reflect the revised end date of 31 December 2020 for the Commonwealth government’s insolvency measures.

Temporary changes to insolvency laws – FED

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The Federal Government has made temporary changes to insolvency laws under the Coronavirus Economic Response Package Omnibus Act 2020, aimed at relieving current economic pressures on individuals and companies.

The Act commenced on 25 March 2020.

These temporary changes to insolvency laws are as follows:

Bankruptcy

The time for a debtor to comply with a bankruptcy notice has been extended from 21 days to six months. The threshold for initiating bankruptcy proceedings increases from $5,000 to $20,000. These changes will apply for six months from commencement of the Act.

The same six month time extension applies to the time within which a debtor is protected from enforcement action by a creditor, following their presentation of a declaration of intention to present a debtor’s petition, under s 54A Bankruptcy Act.

Liquidation

The time for a debtor company to comply with a statutory demand has been extended from 21 days to six months. The threshold to issue a statutory demand has been increased from $2,000 to $20,000. These changes will apply until 25 September 2020.

Safe harbour

A new, temporary, s 588GAAA ‘Safe harbour—temporary relief in response to the coronavirus’, of the Corporations Act 2001 provides that the existing civil penalties for directors failing to prevent insolvent trading under ss 588G(2) do not apply in relation to a debt incurred by a company if the debt is incurred in the ordinary course of the company’s business and until 25 September 2020.

Practitioners should keep these changes in mind for the next six months and be aware of the end date, which is 25 September 2020.

Alerts have been added to the By Lawyers Insolvency – Bankruptcy of Individuals, Insolvency – Company Liquidation and Companies commentaries notifying subscribers of these changes.

 

Keep up-to-date with our latest COVID-19 News & Updates

Insolvency – Company liquidation – FED

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A full review of the By Lawyers Insolvency – Company Liquidation guide has been conducted by our highly experienced author, Michael Murray.

The review ensures that all content is in line with current law and practice.

Updates and enhancements include:

  • New commentary on the statutory demand process, including applications to set aside statutory demands; and
  • Updates to a number of precedents to improve the Insolvency – Company Liquidation matter plan.

Keep up to date with By Lawyers

These updates to our Insolvency – Company Liquidation guide are part of By Lawyers commitment to the continual enhancement of our publications. By Lawyers subscribers can be confident that their guides and precedents are always kept up to date so they can enjoy practice more.

Insolvency – Bankruptcy of individuals – FED

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Author review

A full review of the By Lawyers Insolvency – Bankruptcy of Individuals guide has been conducted. The review ensures that all content is in line with current law and practice.

This review was conducted by our highly experienced author, Michael Murray.

Updates and enhancements include:

  • New commentary on recent law changes to debt agreements;
  • New commentary on the Federal Court and Federal Circuit Court processes for creditor’s petitions, applications to set aside bankruptcy notices and examinations; and
  • New commentary and matter plan additions because of new online processes for voluntary bankruptcy.

Keep up to date with By Lawyers

This review of our Insolvency – Bankruptcy of Individuals guide is part of By Lawyers commitment to regular updating and enhancement of our publications. By Lawyers always keeps you up to date so you can enjoy practice more.

Insolvency To Do lists – FED

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The By Lawyers Bankruptcy and Liquidation guides have been updated with the inclusion of four Insolvency To do lists.

These new precedents provide practical guidance for practitioners as they progress through a matter.

The To Do lists provide helpful prompts for each important step to be taken in a matter when acting for either the creditor or the debtor in both personal and corporate insolvency matters, including:

  • Liquidation;
  • Winding up;
  • Deeds of company arrangement;
  • Debt agreements;
  • Personal insolvency agreements; and
  • Bankruptcy proceedings.

The new To Do lists can be found in folder A. Getting the Matter Underway in the By Lawyers Bankruptcy and Insolvency guides and will assist practitioners in safely and efficiently managing their matters.

Costs disclosure – Increase of legal rates during a matter

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Increase of legal rates during a matter

All By Lawyers Costs Agreements and Client Service Agreements have been updated to include a clause notifying a client that legal rates may increase during the course of a matter requiring a revision of the costs estimate provided. This clause provides for 30 days written notice of any proposed changes to legal rates. While such a clause is not required by Legal Profession legislation concerning costs disclosure requirements, providing such notice on initial costs disclosure is considered best practice.

All of our Guides contain Costs Agreements (Client Service Agreements for QLD Guides) within the folder ‘A. Getting the mater underway’. All of our agreements are compliant with the relevant Legal Profession legislation and are reviewed and updated regularly to ensure compliance.

Insolvency – personal bankruptcy and corporate insolvency

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This publication has been updated as the result of an extensive author review, including new content discussing the recent changes introduced by the Insolvency Law Reform Act 2016.
For corporate insolvency up to date case law examples have been included.
Enhanced content on how bankruptcy proceedings are regulated in Australia and the role of creditors.

Bankruptcy and Liquidation

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Bankruptcy and Liquidation

NOVEMBER 
  • Further Information – added more links
  • Costs Agreements – reference to interstate costs laws added and updated interest clause
OCTOBER
  • New article – Trading whilst insolvent
  • Costs Agreements
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting
    • VIC/NSW – Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
    • WA – Added clause on scale fees.
AUGUST
  • Costs Agreements added for Tasmania and Northern Territory.
APRIL
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
FEBRUARY
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

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