Bankruptcy in Australia - Who exactly do I speak to?

Should I get in touch with my accountant about Bankruptcy?

The answer seems clear doesn't it: if anybody knows your financial circumstance well in Australia, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant doesn't have your best interests in mind when it comes to Bankruptcy, it's that his experience lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will spend very little to no time on bankruptcy, it's generally performed as a post graduate specialty program for those who intend to work in the field. Unless your accountant is an insolvency specialist, he wouldn't know that a lot about the effects 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 often tend to be large firms with very nice office spaces who charge accordingly.

Should I speak to my Solicitor about Bankruptcy?

No! You can talk with your solicitor in Australia but more than likely it won't do you much good. Solicitors are certainly good at doing things lawyers do, like helping 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 background, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner until you have a law or accounting degree.

Just as there are few insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay an ample price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to help you with this, they have no hidden agendas and they're a superb option for really helping you think through your situation when it comes to Bankruptcy. If you are stressing out constantly, not sleeping, not eating or over-eating and thinking about money pressures at all times, 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 someone to talk about with you what your options are. Don't let your financial problem destroy your life - in the end it's just money.

If you would like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to get in touch with Liquidation Service on 1300 795 575, or visit our website: www.liquidationservice.com.au.com.au.

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

When people in Australia come to me trying to talk about Bankruptcy, they are constantly packed with questions. The internet has lots 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 very most typical worries is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are a manager of a company any shape or size you can maintain your business if you want to. In Australia, businesses that are insolvent have a few options for instance liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some qualified 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 a few crucial 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 will likely need to resign as a director after you're bankrupt.

A constraint that applies when you are actually bankrupt as a business owner is that you may be in your very own business as a sole trader only. Generally there are things you will want to make known as an aspect of that but essentially you can still run your business. For some business owners, bankruptcy affects 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 therefore you can no longer trade without that license, so make sure you are asking the best questions when it comes to licenses and Bankruptcy in Australia.

However 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 rack up heaps of debt in your company, then go bankrupt and after that open the doors the next day like nothing had happened. There are laws in place to stop what is called phoenix companies popping up out of the ashes of an old company.

Having said that, it's just a matter of talking with the best people about Bankruptcy. Here in this situation you may believe you need a liquidator for your company, and you could be right, but keep in mind that every liquidator is distinct and have their own motives. Liquidators earn money from your liquidation - heaps of money - so what advice do you think you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is possibly risky as it can have very significant implications for directors and business owners. This is since it is one of those cases where what the right guidance for one business owner is the incorrect advice for the other. There are some basics however, that you may benefit from. There is no restriction to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your providers under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it comes to Bankruptcy, don't get too stressed about what you can and can't do as a business owner, just get the appropriate 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 speak with Liquidation Service on 1300 795 575, or visit our website:.liquidationservice.com.au.com.au.

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

When it comes to Bankruptcy Australia, generally people aren't aware that there can be both voluntary, and involuntary bankruptcy - each have unique approaches and policies.

Involuntary bankruptcy arises when somebody you owe money to involves the court to declare you bankrupt. Usually when you get one of these types of notices, you have normally 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documentation in and afterwards you are bankrupt.

You can contest a bankruptcy notice by going to court immediately after the 21 days have expired and put your case forward, to avoid it going to the next level. Apart from the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're conducted to in the very 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 in all likelihood to be made bankrupt by someone, get some advice and act on that advice. Generally I've found it's always better to know what you can and can't do before you have someone bankrupt you. Once you are bankrupt, it's usually too late.

Voluntary Bankruptcy

On the other hand, when it comes to Bankruptcy, sometimes there are moments that it is the most ideal option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for every person of course, but generally I find that one way you could work it out is to figure out how long it will take you to pay each 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 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 fail to remember 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 very seriously 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 unfair. The punishment doesn't seem to equate to 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 rubbed out completely.

So if your credit rating is a big factor in trying to decide whether to enter into 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 contrast is that with a DA or PIA you pay back the money and still 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 part 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 provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared with countries like the United States, our bankruptcy laws are extremely good.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government assumes 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 in turn 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 actually insured.

There is far more that can be said about 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, keep in mind that there are always alternatives when it involves Bankruptcy in Australia, so do some homework, and Good luck!

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

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

Bankruptcy Australia is a intricate process, and you should ensure you get the right suggestions. And when it comes to your income being affected, the answer to the question is maybe. The first thing you need to know about going bankrupt is there is no rule on how much you can earn. However, I will point out that your income is a considerable 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 amount of money you earn each year. 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 increases the threshold amount, if you have financial strains in Australia such as medical, child care, considerable travel to and from work, or a situation where your spouse used to work but is no longer able to add to the household income.

Some of the informative parts of Bankruptcy is that your employer will not be informed when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you pay $5,000 child support each year and you have no dependents living with you then your modified net income limit will be $55,332.10.

There are more issues covering income and what is or isn't thought of as income - if you're unsure, it's a good idea to get specialist advice. The reason you should consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will be taken by the ATO whilst you are bankrupt to add 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 limitations.

If you think when it comes to Bankruptcy, your issue is more complicated, then just get professional advice in Australia. I may seem like a broken record, but bear in mind that it's always a smart idea to overcome these options prior to declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.

If you intend to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then don't hesitate to contact Liquidation Service on 1300 795 575, or go to our website: liquidationservice.com.au.com.au.

Bankruptcy in Australia - Choices, Choice, Choices

When it comes down to Bankruptcy Australia, there are a number of options that we get given depending upon who we are, who we talk to, and just what has gone wrong. The most common trouble I see with Bankruptcy is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Australia, most of the information and facts you receive on this subject matter will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, I can assure you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for aiding you wrap each one of your credit card and personal loans into a single neat and tidy package.

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

Typically I find if you read this blog you've most likely attempted to consolidate your debts already and come to the following realisations like these:

• Your credit rating is not good, and your credit file definitely has nonpayments on it so no one 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 a small amount of interest simply won't make a lot of difference

• You've undoubtedly arrived at the stage where you've had enough, you're emotionally burnt out, 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 relates to Bankruptcy in Australia, what's the difference between a Debt Agreement and a Personal Insolvency Agreement?

Adaptability is the main thing Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee featuring the government trustee ITSA, and not a private agency that advertises on TV. Basically this process resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these experts negotiate a deal in your place. You can offer a lump sum settlement figure or take part in a payment plan, or you can offer them assets instead of cash. This can sound okay when it comes to the complications with Bankruptcy-- that is up until you discover that one of the challenges with PIA's is that 75 % of the people you owe money to will have to come to an understanding the deal. If they don't, your proposal is denied or has to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they'll settle for under the amount you owe them - it's typically a percentage of the debt-- but allow me to stress this aspect: 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 actually settle for.

Most of the time you'll have to pay back 100 % of the debt owed. This is not 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 come across creditors settling for less 80 % on rare occasions, but that usually only occurs with a public company going 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 structures 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 want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Liquidation Service on 1300 795 575, or visit our website: liquidationservice.com.au.com.au.

Bankruptcy in Australia - Are you going to get bitten?

When people in Australia ask me about Bankruptcy, I tell them the classic 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 hesitant, but the rattlesnake vowed not to bite him in exchange for the ride. They journeyed together only for the snake to eventually bite the boy despite his assurance not to do so. The snake's answer was 'You knew what I was when you picked me up.

Asking for the right financial advice in Australia when it relates to Bankruptcy is a whole lot like that little boy's encounter, fraught with risk and danger, and generally skewed for the benefit of the individual supplying the advice. In many cases you'll get bitten unless you know what you've picked up long before you move forward (avoid the rattlesnakes). I discovered the problem with obtaining financial advice as a teenager, and it has been vital to Bankruptcy. I'd been working hard for a few years, and saved up a little bit 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 some time researching numerous investment options, and I went to visit a few financial advisors. It was clear 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 really different idea of what I should do. This baffled me a lot that it put me off the entire idea of going with any of them.

I'm sure currently you have read more than enough on the internet to be totally overwhelmed about Bankruptcy and exactly what to do. It would undoubtedly be easier for me to help you understand the nature of the financial snakes you might be grasping while you are trying to get to the bottom of your financial problems in Australia. Essentially, you need to try and comprehend what your overarching options are, do your own research into where to proceed with your strategy for Bankruptcy, and then approach what you feel is best in Australia for your requirements. Essentially, you have 3 options for who to turn to.

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

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

Your best bet? A Financial Counsellor that can talk about debt consolidation, personal insolvency agreements, and basically all you have to know when it comes to Bankruptcy.

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Liquidation Service on 1300 795 575, or visit our website: liquidationservice.com.au.com.au.

Bankruptcy in Australia - Changes to help Small Business and Entrepreneurs

5th February 2016 - By Charles Bosse

Do you recognize just how much Bankruptcy in Australia is changing? The Australian Government in late 2015 moved for some innate 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 stay bankrupt, however, this 3 year period may very well be reduced to just 12 months. So if you are inquiring 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 alterations to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that safeguarding 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 prevented 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 issue around this Bankruptcy issue in Australia that some make is that this modification will only strengthen fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to defilement of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not recommending to change the maximum term of 8 years if it deems a bankrupt has behaved in an unethical or fraudulent way, and there are no proposals to change the consequences of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As a bankruptcy professional in Australia, I have a decent share of practical experience when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Australia I have never caught someone abusing the system or acting in an immoral way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur undergo the very difficult task of bankruptcy, not once have I believed they are happy about it. The standard small business owner or entrepreneur in Australia does not start out taking enormous financial risks with the intention to fail. The media loves 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 most effective and brightest in Australia not get rejected 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.

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

At the major end of town large reputable 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 decreased because directors are distressed they'll be personally responsible in an insolvency arrangement if the new project doesn't work out.

The government's suggested 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I can not imagine, that these revisions will be destructive to Australia's economy, indeed these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health field because the emotional cost of bankruptcy is enormous. 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 goes on.

Bankruptcy helps save lives, and it could save yours. If you need some help with your debts in Australia or are just thinking about Bankruptcy, don't hesitate to phone us here at Liquidation Service on 1300 795 575, or visit our website: www.liquidationservice.com.au