Insolvency relief extended until new year

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The Morrison government has extended insolvent trading relief out to 2021 in a bid to prevent further job losses and avoid another massive hit to the economy.

foreshadowed by The Australian Financial Review in July, the move will see the increased thresholds at which creditors can issue a demand on a company and or initiate bankruptcy proceedings extended until December 31.

Relief for directors from personal liability when a company is trading while insolvent will also be maintained until that date.The government said it took the decision to extend the temporary rules, which were due to expire on September 30, to give viable businesses an opportunity to recover from the health crisis instead of failing.“The extension of the temporary changes to the insolvency and bankruptcy laws will continue to provide businesses with a regulatory shield to help them get to the other side of this crisis," Treasurer Josh Frydenberg said.