Some Suggestions from Japan for Reforming Australia’s Personal Bankruptcy Law
This article examines Japan’s contemporary personal bankruptcy law reform experience in light of Australia’s proposed reforms to the Bankruptcy Act 1966 (Cth). Japan’s personal insolvency legislation was substantially revised at the turn of the 21st century and a new proceeding for individual rehabilitation introduced. These innovations built on practical and procedural solutions pioneered in the courts especially in the late 1990s as the number of personal bankruptcies increased after the bursting of the bubble economy. The article shows that by comparison with Japanese approaches to discharge, investigation and continuing obligations, including requirements for income contributions, the proposed Australian reforms are conservative and not as debtor-friendly as those in Japan. The time between filing and discharge in Japan, for example, is flexible and typically no more than a few months. The Australian reforms merely suggest revising the default bankruptcy period from three years to a fixed one year. In practice, the article suggests that the obstacles of adverse credit histories and enforcement of personal guarantees against entrepreneurs remain problems for an entrepreneur seeking a fresh start in both jurisdictions.