The threshold at which Australians in financial strife can be made bankrupt has been dropped to $10,000.

It was temporarily lifted from $5000 to $20,000 in March to give some breathing space to those impacted by the coronavirus pandemic downturn.

As well, from this week the amount of time an individual has to respond to a bankruptcy notice will be 21 days, reduced from six months.

And temporary debt protection will allow for 21 days of relief from creditors, instead of six months.

CommSec chief economist Craig James said the government was understandably unwinding some of its temporary support.

“But it is a sign of confidence on the economic recovery,” he told AAP.

“The government can’t leave support measures in place too long but if there are fresh signs of weakness in the economy these decisions can and should be quickly reversed.”