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.
