# I run a small business in Australia and owe about $18,000 to several suppliers after a downturn, and I have received a bankruptcy notice. I understand?

- Jurisdiction: Australia
- Practice area: Immigration Law
- Published: 2026-10-28
- Last updated: 2026-10-28
- Canonical: https://lawasked.com/au/immigration/i-run-small-business-australia-owe-about-18

## Question

I run a small business in Australia and owe about $18,000 to several suppliers after a downturn, and I have received a bankruptcy notice. I understand exposure draft legislation released on 23 October 2026 would raise the threshold for involuntary bankruptcy from $10,000 to $20,000, give debtors more time to respond to a bankruptcy notice, and stop a proposed debt agreement from itself counting as an act of bankruptcy. How would these changes affect my position, what should I do before responding to the notice, and would a bankruptcy listing still remain on the National Personal Insolvency Index permanently?

## Summary

It depends on whether the proposed legislation has actually been passed into law. If the changes are not yet law, your current $18,000 debt still exceeds the existing $10,000 threshold for involuntary bankruptcy.

## Analysis

The impact of the exposure draft legislation released on 23 October 2026 depends entirely on whether that legislation has been enacted by Parliament. If the law has changed, your $18,000 debt would fall under the new $20,000 threshold, meaning a creditor could not use a bankruptcy notice to force you into involuntary bankruptcy (bankruptcy caused by a creditor) for this specific amount. However, if the current laws remain in place, your $18,000 debt is above the $10,000 limit, and the bankruptcy notice you received is legally valid.

The proposed changes also suggest giving debtors more time to respond and ensuring a proposed debt agreement—an arrangement to pay back a portion of what you owe—does not count as an 'act of bankruptcy.' Under current rules, certain actions can trigger bankruptcy proceedings, but the new rules aim to provide more breathing room.

Regarding your question about the National Personal Insolvency Index (NPII), the provided statutes do not contain information regarding the duration of bankruptcy listings or the specific rules for the NPII. Therefore, I cannot confirm if a listing remains on the index permanently. 

Because the provided statutes focus on consumer goods, migration, and employment, they do not provide the specific rules for responding to a bankruptcy notice or the exact mechanics of the proposed insolvency law changes. You must determine if the 23 October 2026 legislation is currently active law. If it is not, the current $10,000 threshold applies to your $18,000 debt.

## Statutory citations

- Fair Work Act 2009, Section 121 - Exclusions from obligation to pay redundancy pay [in force] (https://www.legislation.gov.au/C2009A00028/latest/text)
  > the employer is bankrupt or in liquidation
- Migration Act 1958, Section 264 - Garnishee notice [in force] (https://www.legislation.gov.au/C1958A00062/latest/text)
  > If an amount ( debt ) is a debt recoverable from a person ( debtor )

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