Insolvency reforms commenced 1 January 2021

Significant changes to Australia's insolvency landscape commenced on 1 January 2021 and include:
 A new Debt Restructuring Process for small businesses;
 Temporary restructuring relief; and
 A new Simplified Liquidation Process for small businesses.
 

These changes are intended to be more suitable than current processes for small businesses (with liabilities <$1 million) by reducing complexity, time and costs associated with the current processes to achieve better outcomes for creditors and employees.

AICM has been actively representing members in the expedited government consultation process enabling us to provide you with what you need to know about the reforms.

Our lobbying for reform of the unfair preference claim regime has achieved a significant win for credit providers, frustrated by unfair preference claims.
 
The simplified liquidation process restricts claims to:
 Within 3 months of Liquidation; and
 Greater than > $30,000 
 
 

RESOURCES FOR CREDIT PROFESSIONALS

What credit professionals need to know

Leveraging our extensive network and submissions to government we have prepared a ready reckoner for credit professionals. 

Read the article

 

Additional Reading from our Partners

Results Legal - summary of reforms

Turkslegal - FAQ's

VIncents  - Features of reforms

 

ASIC INFORMATION

 How to access extensions to temporary restructuring relief
 Information about simplified liquidation
 Information about entering Restructuring and the Restructuring Plan
 Information about changes to the application and ongoing management requirements to be registered as a liquidator



AICM's submissions on the draft legislation and regulations

Representing members with the government is a key pillar of how the AICM supports its members. In addition to documenting on behalf of members, we engage directly with the government, industry bodies, organisations and individuals such as:
 

 AICM Members, especially CCE's
 The Australian Restructuring Insolvency and Turnaround Association (ARITA)
 The Australian Chamber of Commerce and Industry (ACCI)
 The Australian Finance Industry Association (AFIA)
 The Australian Collectors and Debt Buyers Association
 AICM National and Divisional Partners Click here to view
 Credit, Insolvency and Legal Professionals
 University academics

 

Submission - 12 October

Submission - 24 November

 

Government documents

Fact sheet

Final bill and other documents

Regulations

 

2020 Insolvency Risk Report

Our inaugural AICM Insolvency Risk report was released to members in May 2020.  

Produced amid the most rapidly changing economic conditions imaginable, this report provides a valuable long term resource for the interpretation of emerging trends along with insights central to determining how these may impact your credit operation.

The report aims to provide a comprehensive and detailed overview of the underlying trends affecting credit and insolvency risk in Australia in 2020. 

Drawing on the AICM’s extensive network of regulators, specialist industry bodies and key credit industry stakeholders, this report summarises data from relevant public and private sector sources, complemented by insights and deep knowledge from industry experts to provide an unsurpassed analysis in respect of:
-  Historic insolvency trends
-  Trends in the lead indicators of insolvency
-  What these trends mean for you

View Report

The 2021 insolvency risk report will be released as part of our National Insolvency Seminars commencing in March 2021.