Bankruptcy in Gladstone - Changes to help Small Business and Entrepreneurs

Do you recognize how much Bankruptcy Gladstone is changing? The Australian Government at the end of 2015 put forward some foundational changes to the Bankruptcy Laws in Australia. The most significant of these is the length of time that a person is bankrupt for. Right now, there is a minimum amount of time that you must remain bankrupt, having said that, this 3 year period may in fact be reduced to just 12 months. So if you are asking about Bankruptcy, this news may be pretty important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 recommended that "the proposed changes to ease the burden of bankruptcy laws didn't go far enough and the government should adopt US-style laws to protect the family home".

These modifications to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding family assets was necessary because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws discouraged investors from supporting start-ups, and therefore mentoring had been "driven out of the system".

"They naturally find it very intimidating themselves personally and with their assets at risk in a risky early-stage deal, but with their own money in the deal and a lightened-up provision I think we 'd probably see more willingness. It could be more important than the money."

Fraudulent Behavior

The debate about this Bankruptcy issue in Gladstone that some make is that this variation will only motivate fraudulent behavior opening pandora's box so to speak for the unscrupulous to abuse of the bankruptcy system. We have looked at the minimum, but on the other side of the matter, The government is not recommending to change the maximum term of 8 years if it deems a bankrupt has operated in an unethical or fraudulent way, and there are no proposals to change the repercussions of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As an insolvency professional in Gladstone, I have a reasonable share of knowledge when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Gladstone I have never uncovered someone abusing the system or acting in a reckless way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur look at the very tough task of bankruptcy, not once have I perceived they are happy about it. The average small business owner or entrepreneur in Gladstone does not start out taking enormous financial risks with the intent to fail. The media prefers citing the apparent misuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

These proposed changes will be good for often the best and brightest in Gladstone not get kicked out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, employers keeping this country going.

Certainly there is a fine line with the things the government is trying to do here, because they are trying to balance helping people who have made decisions out of their control, and dissuading people from making problems that land them in trouble and as a result an issue of Bankruptcy. However you likewise don't want to eliminate the experience and knowledge that business owners have. You absolutely don't want to shatter people simply because they have had a genuine failure in a large or small start-up project that has not succeeded.

At the big end of town large established companies have long been criticised for their failure to innovate - lets face it they would be more likely to do so if the risks of bankruptcy were lessened because directors are distressed they'll be personally liable in an insolvency arrangement if the new venture doesn't work out.

The government's proposed 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I can not imagine, that these variations will be detrimental to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health sector because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Gladstone not a day passes where I don't find out the tragic stories of relationship failures, thoughts of suicide and the list goes on.

Bankruptcy helps save lives, and it could save yours. If you really need some help with your debts in Gladstone or are just thinking of Bankruptcy, don't hesitate to phone us here at Bankruptcy Experts Gladstone on 1300 795 575, or visit our website: bankruptcyexpertsgladstone.com.au

Bankruptcy in Gladstone - does it matter if it is voluntary?

When it comes to Bankruptcy Gladstone, often people aren't aware that there can be both voluntary, and involuntary bankruptcy - both have different approaches and policies.

Involuntary bankruptcy occurs when a person you owe money to applies to the court to declare you bankrupt. Usually when you get one of these types of notices, you have actually 21 days to pay all the debt. If you do not, then the creditor returns to the court and requests the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documents in and then you are bankrupt.

You can contest a bankruptcy notice by going to court following the 21 days have expired and put your case forward, to stop it going to the next level. Other than the way you became bankrupt there is in fact no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're conducted to in the same way.

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are prone to be made bankrupt by someone, get some guidance and act on that advice. Generally I've found it's always more effective to know what you can and can't do before you have a person bankrupt you. Once you are bankrupt, it's normally far too late.

Voluntary Bankruptcy

Alternatively, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may need to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for every person of course, but more often than not I find that one way you could work it out is to figure out just how long it will take you to pay every one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may serve to help you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the level she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and overlook to pay your $30 phone bill for 6 months more, it's very likely the phone service will default your credit file. That default will remain on your file for 5 years, so for $30 you can have your credit file truly damaged for that period of time - and all of this will impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is not fair. The punishment doesn't seem to equal the crime in my book. So if you already have defaults on your credit report for 5 years, remember that bankruptcy is on your credit file for a total 7 years then its erased completely.

So if your credit rating is a big aspect in trying to decide whether to participate in a Debt Agreement or Personal Insolvency Agreement or Bankruptcy remember they will all sit on your credit file for a total of 7 years. The biggest change is that with a DA or PIA you pay back the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element more people are afraid of when they come to me to go over their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. As compared to countries like the United States, our bankruptcy laws are very reasonable.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government believes the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which costs the taxpayer anyway.

Bankruptcy wipes all of your debts including ATO debts with the exception of a few things:

·         Centrelink Debts, Court Fines like parking and speeding fines.

·         HECS or Fee Help loans.

·         Money to pay for a car accident if the car was not actually insured.

There is far more that can be said about doing this and Bankruptcy in general but the objective of this blog was to help you decide between a few available options. When getting some advice, always remember that there are always possibilities when it relates to Bankruptcy in Gladstone, so do some investigation, and Good luck!

If you want to find out more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Gladstone on 1300 795 575, or visit our website: bankruptcyexpertsGladstone.com.au.