Changes will give creditors an alternative

The Age reports creditors will be less likely to force people into bankruptcy to recover debts, according to lawyers. It will also be harder for debtors to transfer assets to other family members in order to avoid paying up. Under the Act, unpaid creditors can either send a person into bankruptcy or reach an arrangement under Part X of the Act. However, Insolvency & Trustee Service Australia said the number of people entering the Part X process had fallen dramatically in the past decade. A spokesperson said it was hoped the changes would reverse the trend. Lawyers said Part X had fallen out of favour with creditors because loopholes in the Act allowed debtors to ‘hide’ assets and pay selected creditors who would then agree to favourable arrangements for the debtor. Full report in The Age