Before the pandemic, the minimum threshold to trigger a bankruptcy was $5,000: It was raised to $20,000 in March, and will be wound back to a new threshold of $10,000 in January.

Other temporary debt protections will also cease, including the amount of time an individual has to respond to a bankruptcy notice restored to 21 days, down from six months.

Twenty-one days' relief from creditors - also down from six months - will cease.

The term 'zombie company' refers to companies surviving through such government protections, which otherwise would have declared bankruptcy or become insolvent.

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Update resultsUpdate
BankSavings AccountBase Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Minimum Monthly Deposit Minimum Opening Deposit ATM Access Joint Application TagsFeaturesLinkCompare
4.40% p.a.
5.75% p.a.
Intro rate for 4 months
then 4.40% p.a.
$980
4 months
$0
$250,000
$0
$0
Featured
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
4.75% p.a.
5.35% p.a.
Intro rate for 4 months
then 4.75% p.a.
$1,001
4 months
$0
$249,999
$0
$0
Featured
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Bonus rate of 5.50%
Conditions apply.
5.50% p.a.
$1,128
$0
$100,000
$0
$0
Featured *Rate varies on savings amount
  • Deposit $500 per month to get bonus interest
  • 5.50% p.a. available on total savings up to $100k.
  • 5.00% p.a. applies to savings between $100k-250K.
  • Tiered bonus rates apply. (TMDs at ubank.com.au)
0.55% p.a.
Bonus rate of 4.95%
Conditions apply.
5.50% p.a.
$1,128
$0
$100,000
$1,000
$0
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Bonus rate of 3.25%
Conditions apply.
5.25% p.a.
Intro rate for 4 months
then 3.25% p.a.
$790
4 months
$0
$1,000,000
$50
$1
  • Earn up to 5.25% p.a. interest on balances up to $1M. T&Cs apply.
0.50% p.a.
Bonus rate of 4.85%
Conditions apply.
5.35% p.a.
$1,097
$1
$50,000
$500
$1
0.05% p.a.
Bonus rate of 4.95%
Conditions apply.
5.00% p.a.
$1,023
$1
$250,000
$20
$0
0.05% p.a.
Bonus rate of 5.45%
Conditions apply.
5.50% p.a.
$1,128
$0
$50,000
$1,000
$0
For customers aged 14-35 years
0.05% p.a.
Bonus rate of 5.30%
Conditions apply.
5.35% p.a.
$1,097
$0
$250,000
$1,000
$0
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

Andrew Spring, partner at insolvency specialists Jirsch Sutherland, said the rules upset the pre-COVID economy's "equilibrium". 

"Not all businesses have remained viable; or have felt the impacts so severely that they are too far 'underwater' to be able to return to profitability. These 'zombie' businesses will have to close," he said.

However, the protections ceasing isn't necessarily all bad news, even for struggling companies, according to Mr Spring.

"Think of the symbiotic relationship between the hunters and the prey of the migrating herds - the herd’s genetic strength is improved by the weakest being culled by the predators," he said.

"We should think of the valuable resources that reside in these businesses, both human and asset based, that can be redeployed into a more successful venture.

"An early intervention and repurposing of these resources will not only prevent any potential 'domino effect' on these companies' creditor group due to increasing bad debt, but should also stimulate economic activity and success.

"Insolvency is not contagious, but if we think of it like a disease, then the earlier it is diagnosed and treated the more likely that the debtor will survive."

Back in May, insolvency experts warned that protections put in place merely 'kicked the can down the road'.

CreditorWatch statistics indicate about 8,000 to 9,000 firms are put into administration every year. 

In April and May 2020, there were 1,200 fewer court actions over such matters, compared to the same period in 2019. 

Personal insolvencies throughout the pandemic are well down compared to the months prior, but certain industries have seen slight increases, such as construction and retail, since changes to JobKeeper were implemented in late September.

jirschsuth

Source: Jirsch Sutherland

Photo by Sigmund on Unsplash





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