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Brandis backs down on bankruptcy fees



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THE HON MARK DREYFUS QC MP SHADOW ATTORNEY-GENERAL SHADOW MINISTER FOR THE ARTS MEMBER FOR ISAACS

MEDIA RELEASE

BRANDIS BACKS DOWN ON BANKRUPTCY FEES

Labor has voted in the Senate to disallow a new $120 fee for filing for voluntary bankruptcy introduced by the Abbott Government. The fee was introduced in April by the Attorney-General.

In what is becoming Senator Brandis’ hallmark style, the Government did not consider the consequences of the fee, or properly consult with stakeholders.

The $120 fee had the absurd effect of rendering many people ‘too poor to go bankrupt’.

Many people seeking voluntary bankruptcy are on incomes of $20,000 a year or less. At this level of poverty, a $120 fee is more than 30 per cent of a week’s income.

The fee forced people in desperate financial situations to forgo essentials for themselves or their families, rely on emergency relief payments, or add to their debt by using a credit card or payday loan.

Data released yesterday by Financial Counselling Australia showed that people were forced delay filing for bankruptcy because of the fee.

Voluntary bankruptcy is an important, last resort option for those who are unable to pay back unmanageable debts.

A fee which prevents people from filing for bankruptcy pushes desperate people into further debt.

TUESDAY, 24 JUNE 2014