Bankruptcy may be harder to enforce and easier to escape

Creditors may not be able to make individual debtors bankrupt so easily under reforms canvassed by the Attorney-General's Department.

Options considered by the government include reducing the maximum term of bankruptcy for a first time bankrupt to one year from three years.

Another option is to lift the minimum debt for a creditor's petition to put a debtor into bankruptcy to $10,000 from $2000.

The department is also considering removing the National Personal Insolvency Index from the public record. Access to the NPII is currently available for a fee through one of three approved agents of the Insolvency and Trustee Service Australia.

The Financial Review reported on the options for bankruptcy reforms today following questions raised by Coalition senators during estimates hearings last Wednesday.

While business-related bankruptcies continue to decline, the growth in non-business related bankruptcy activity continues to grow.

Almost ninety per cent of bankruptcies were non-business related in the March quarter.

There were 824 business-related bankruptcies in the March quarter, down from 851 in December and 958 in the March quarter of 2008.