Bankruptcy in Australia - Who do I speak to?

Should I speak to my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial situation well in Australia, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant may not have your best interests at heart when it comes to Bankruptcy, it's that his knowledge lie in helping you save you money at tax time, lowering your tax liability and lodging your BAS.

Most accounting degrees will devote very little to no time on insolvency, it's generally performed as a post graduate speciality course for those who wish to work in the field. Unless your accountant is an insolvency specialist, he wouldn't know that a lot about the implications of Bankruptcy, I can guarantee you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Australia, they tend to be large firms with very nice offices who charge accordingly.

Should I speak to my Solicitor about Bankruptcy?

No! You can speak to your solicitor in Australia but more than likely it won't do you much good. Solicitors are certainly good at undertaking things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Australia have the tendency to have either a legal or accounting experience, and the reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just as there are a couple of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay a considerable price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services to guide you with this, they have no hidden agendas and they're a splendid option for helping you think through your situation when it comes to Bankruptcy. If you find yourself stressing constantly, not sleeping, not eating or over-eating and thinking about money pressures constantly, then get some help.

There are also charities around Australia like Lifeline that offer a wonderful service. They will be a sounding board if you just need somebody to talk about with you what your possibilities are. Don't let your financial issue destroy your life - ultimately it's just money.

If you wish to learn more about what to do, where to turn and what points to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Australia on 1300 795 575, or visit our website: www.bankruptcyexperts.com.au

Bankruptcy in Australia - Will I lose my business if I go bankrupt?

When people in Australia come to me planning to discuss Bankruptcy, they are always packed with questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it clearer. One of the most standard problems is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are a manager of a business any shape or size you can maintain your business if you want to. In Australia, businesses that eventually are insolvent have a few options for instance, liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complicated area so get some reliable advice on this if you have a business. Generally speaking, the financial obligations in a business and personal debts go together when a business owner goes bankrupt. There are several necessary implications for directors of companies when it pertains to Bankruptcy in Australia: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to need to resign as a director once you're bankrupt.

A constraint that applies when you are actually bankrupt as a business owner is that you can be in your own business as a sole trader only. Generally there are things you should reveal as an aspect of that but in a nutshell you can still run your business. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. Such as, if you run a building company, your license will be suspended once you're bankrupt and as a consequence you can not trade without that license, so make sure you are asking the appropriate questions when it comes to licenses and Bankruptcy in Australia.

Having said that if your business is not impacted directly by such issues, then you'll have to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your company, then go bankrupt and after that open the doors the next day like absolutely nothing had happened. There are laws in place to prevent what is called phoenix companies popping up out of the ashes of an old company.

Having said that, it's just a point of talking to the suitable people about Bankruptcy. In this situation you may think you need a liquidator for your business, and you could be right, but remember that every liquidator is unique and have their own motives. Liquidators profit from your liquidation - heaps of money - so exactly what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is possibly unsafe as it can have very significant implications for directors and business owners. This is because it is just one of those cases where what the right advice for one business owner is the inappropriate advice for the other. There are some fundamentals however, that you may benefit from. There is no reduce to the size of the business you run even though you are bankrupt. You can employ staff. You can constantly deal with your distributors under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it concerns Bankruptcy, don't get too uneasy about what you can and can't do as a business owner, just get the right advice ... If you want to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Australia on 1300 795 575, or visit our website: www.bankruptcyexperts.com.au

Bankruptcy in Australia - Choices, Choice, Choices

When it comes down to Bankruptcy Australia, there are a great deal of choices that we get given depending upon who we are, who we talk to, and what exactly has happened. The most common confusion I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Australia, much of the information you receive on this subject will reflect the interests of the advice giver. Therefore, if you call a debt consolidation provider, I can guarantee you they will tell you to consolidate your debts. The debt consolidation operation is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for assisting you wrap every one of your credit card and personal loans into just one neat and tidy package.

I hate to tell you this but these people aren't doing it for free. Please do not misunderstand me: if you consider your financial troubles in Australia may be solved by paying less interest, then go on and check out the choices. Even a small amount of interest saved over years quickly adds up.

Normally I find if you are reading this blog you've most likely attempted to consolidate your debts already and come to the following realisations such as these:

• Your credit rating is no good, and your credit file definitely has nonpayments on it so nobody will offer you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving on a bit of interest just won't make a lot of difference,.

• You've most probably arrived at the stage where you've had more than enough, you're mentally fatigued, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

So when it comes to Bankruptcy in Australia, what's the difference between a Debt Agreement and a Personal Insolvency Agreement?

Freedom is the main point Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee including the government trustee ITSA, and not a private company that advertises on TV. Basically this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys negotiate a deal on your behalf. You can offer a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets rather than cash. This might sound acceptable when it comes to the troubles with Bankruptcy - that is up until you discover that one of the difficulties with PIA's is that 75 % of the people you owe money to need to agree on the deal. If they don't, your proposal is denied or will have to be renegotiated.

Generally people you owe money prefer all their money back as well as interest. Sometimes they'll go for beneath the amount you owe them - it's generally a percentage of the debt -  but allow me to stress this part: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will really settle for.

Most of the time you'll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is agreed upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've heard of creditors opting for less 80 % on rare occasions, but that usually only occurs with a public company entering into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of shrewd lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Australia aren't going to get that lucky!

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Australia on 1300 795 575, or visit our website: bankruptcyexperts.com.au

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

When it comes to Bankruptcy Australia, usually people aren't aware that there are both voluntary, and involuntary bankruptcy - both of these have unique methods and guidelines.

Involuntary bankruptcy arises when a person you owe money to involves the court to declare you bankrupt. Commonly when you get one of these notices, you have normally 21 days to pay all the debt. If you do not, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the documentation in and after that you are bankrupt.

You can object to a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're managed to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are more than likely to be made bankrupt by someone, get some tips and act on that advice. Generally I've found it's always much better to know what you can and can't do before you have someone else bankrupt you. Once you are bankrupt, it's typically far too late.

Voluntary Bankruptcy

Nevertheless, when it comes to Bankruptcy, sometimes there are times that it is the most effective option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for everybody of course, but commonly 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 assist you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who came to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the rate 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 telephone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file seriously damaged for that period of time - and all of this will affect how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is wrong. The punishment doesn't seem to equate to the crime in my book. So if you currently have defaults on your credit report for 5 years, bear in mind that bankruptcy is on your credit file for a total 7 years then its wiped off completely.

So if your credit rating is a big factor 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 difference is that with a DA or PIA you repay the money and still have it on your file for 7 years.

Bankruptcy

I have talked about 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 talk about their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. As compared to countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a couple of hundred years ago debtors went to prison. These days I suppose the government finds that 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 every one of your debts including ATO debts except for a few things:

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

·         HECS or Fee Help loans.

·         Money to take care of a car accident if the car was not insured.

There is a lot 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 possible options. When getting some advice, remember that there are always possibilities when it relates to Bankruptcy in Australia, so do some research, and Good luck!

If you wish to learn more about precisely what to do, where to turn and what questions to ask about Bankruptcy, then feel free to check with Bankruptcy Experts Australia on 1300 795 575, or visit our website:bankruptcyexperts.com.au

Bankruptcy in Australia - Will my income be changed if I go bankrupt?

Bankruptcy Australia is a complicated process, and you should be sure you get the right insight. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have to know about going bankrupt is there is no constraint on how much you can earn. However, I will say that your income is a serious consideration when working through when it comes to Bankruptcy.

The very first thing you need to understand about this area of Bankruptcy is just how much you can earn before you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand quantity you earn annually. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can request a hardship variation that raises the threshold amount, if you have financial commitments in Australia like medical, child care, significant travel to and from your job, or a circumstance where your partner used to work but is not able to support the family income.

Some of the useful parts of Bankruptcy is that your employer will not be told when you file for bankruptcy. Also, Child support is always taken into consideration in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also thought about, for example if you pay $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.

There are much more issues covering income and what is or isn't thought of as income - if you're unsure, it's recommended to get experienced advice. The reason you will need to consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund can be taken by the ATO whilst you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund provided that doesn't take you over your threshold income restrictions.

If you believe that when it comes to Bankruptcy, your circumstance is more complicated, then feel free to get qualified advice in Australia. I may sound like a broken record, but bear in mind that it's always a smart idea to overcome these options before declaring bankruptcy, because once you have filed the paperwork it's far too late to change your mind.

If you intend to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Australia on 1300 795 575, or explore our website: www.bankruptcyexperts.com.au

Bankruptcy in Australia - Changes that help Small Business and Entrepreneurs

Do you know just how much Bankruptcy Australia is changing? The Australian Government at the end of 2015 submitted some inherent changes to the Bankruptcy Laws in Australia. One of the most significant of these is the length of time that a person is bankrupt for. Currently, there is a minimum amount of time that you must continue to be bankrupt, but, this 3 year period may in fact be reduced down to just 12 months. So if you are asking about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 suggested 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 shifts to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that giving protection to family assets was very important 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 argument around this Bankruptcy issue in Australia that some make is that this change will only invite fraudulent behavior opening pandora's box so to speak for the unscrupulous to maltreatment of the bankruptcy system. We have looked at the minimum, but on the other side of the problem, The government is not submitting to change the maximum term of 8 years if it deems a bankrupt has performed in an unethical or fraudulent way, and there are no plans to change the implications of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As an insolvency professional in Australia, I have a fair share of practical experience when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Australia I have never come across someone abusing the system or acting in an unaccountable way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur look at the very problematic task of bankruptcy, not once have I really felt they are happy about it. The ordinary small business owner or entrepreneur in Australia does not start out taking enormous financial risks with the intent to fail. The media prefers citing the apparent injustice that will be rampant if these changes occur, what a joke!

A Win for Small Business

These suggested changes will be good for often the most effective and brightest in Australia not get tossed 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, managers keeping this country going.

There certainly is a fine line with precisely what the government is trying to do here, because they are attempting to balance helping people who have made decisions out of their control, and dissuading people from making miscalculations that land them in trouble and consequently an issue of Bankruptcy. However you likewise don't want to kill the experience and knowledge that business owners have. You certainly don't want to smash people simply because they have had an honest failure in a large or small start-up enterprise that has not panned out.

At the major end of town large developed 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 insolvency were scaled down because directors are troubled 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 enable Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I can not imagine, that these adjustments will be damaging to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health industry because the emotional cost of bankruptcy is substantial. When it comes to Bankruptcy in Australia not a day goes by where I don't hear the tragic experiences of relationship failures, thoughts of suicide and the list continues.

Bankruptcy helps save lives, and it could save yours. If you are in need of some assistance with your debts in Australia or are just considering Bankruptcy, don't hesitate to contact us here at Bankruptcy Experts Australia on 1300 795 575, or visit our website:bankruptcyexperts.com.au.

Bankruptcy in Australia - Are you going to get bitten?

When people in Australia ask me about Bankruptcy, I let them know the timeless Native American Fable of the little boy and the Rattlesnake. An old rattlesnake asks a passing young boy to carry him to the mountain top to see one last sunset before he passes away. The boy was reluctant, but the rattlesnake pledged not to bite him in exchange for the ride. They journeyed together only for the snake to eventually attack the boy despite his vow not to do so. The snake's response was 'You knew what I was when you picked me up.

Getting the right financial advice in Australia when it concerns Bankruptcy is a lot like that little boy's experience, tangled up with risk and danger, and normally skewed for the benefit of the person giving the advice. In most cases you'll get bitten except if you know what you've picked up before you move forward (avoid the rattlesnakes). I discovered the problem with getting financial advice as a teenager, and it has been vital to Bankruptcy. I'd been keeping my nose to the grindstone for a few years, and saved up a small amount of money I wanted to invest. It was the early 1980s so interest rates were quite high and investing your money was rather profitable. I spent a few years researching several investment options, and I went to visit a few financial advisors. It was obvious that they had more money than I did: they had nice suits and plush offices, they all seemed to exude confidence and have all the answers. What hit me was that they all had a very different strategy of what I should do. This confused me so much that it put me off the entire idea of picking any of them.

I'm sure by now you have read enough on the internet to be totally bewildered about Bankruptcy and exactly what to do. It would probably be easier for me to help you understand the nature of the financial snakes you may be picking up while you are trying to get to the bottom of your financial issues in Australia. Essentially, you need to try and recognize what your overarching options are, do your own research into where to proceed with your plan for Bankruptcy, and then approach the things you feel is best in Australia for your needs. Essentially, you have 3 options for who to turn to.

The first option is a Solicitor - This may appear like the go-to choice when you appear to be in trouble. But generally there is only so much support they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their experience comes along with a hefty price.

Another possibility you may think of is your accountant - they are incredibly helpful and vital to the task of operating your business, but for the most part, when you are thinking about Bankruptcy, your accountant won't be much help to you anymore.

Your best option? A Financial Counsellor that can outline debt consolidation, personal insolvency agreements, and pretty much all you need to know when it comes to Bankruptcy.

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Australia on 1300 795 575, or visit our website: bankruptcyexperts.com.au