Abstract
The insolvency of natural persons raises questions not only for a nation’s economy but also for its concern for equity. The World Bank has recently released a Report on the Treatment of the Insolvency of Natural Persons to guide nations in addressing the issues raised by an individual debtor’s insolvency. A brief review of Australia’s personal insolvency laws shows that it addresses many of the issues raised by the Report. However two areas are identified as worthy of further investigation by policy-makers and scholars to better address a concern for equity.
Highlights
The insolvency of natural persons, ie, an individual’s inability to pay debts such that collective action is required, raises some different policy and regulatory issues to those which apply where a legal entity, typically a company, is insolvent
A brief review of Australia’s personal insolvency laws shows that it addresses many of the issues raised by the Report
The Australian Financial Security Authority (AFSA) website includes in its options for dealing with unmanageable debt to ask for help from financial counsellors.[23]
Summary
The insolvency of natural persons, ie, an individual’s inability to pay debts such that collective action is required, raises some different policy and regulatory issues to those which apply where a legal entity, typically a company, is insolvent This is the case whether personal insolvency is addressed through sequestration of the debtor’s estate or through a formal arrangement with creditors to accept, say, a payment plan in discharge of their debts. This article provides an overview of the Report’s findings, in particular the core legal attributes of an insolvency regime for natural persons and briefly comments on the presence or otherwise of these attributes in Australia’s personal insolvency regime It explores two issues highlighted by this review of Australia’s regime as worthy of consideration by policy-makers and scholars when examining ways to improve Australian personal insolvency law.
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