5th February 2016 – By Charles Bosse
Do you have an idea of how much Going Bankrupt in Australia is changing? The Australian Government at the end of 2015 put forward 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. At the moment, 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 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 changes to the issue of Going Bankrupt will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that defending 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 deterred investors from supporting start-ups, and as a result 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.”.
The controversy surrounding this Going Bankrupt issue in Australia that some come up with is that this variation will only reinforce fraudulent behavior opening pandora’s box so to speak for the unscrupulous to exploitation of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not proposing 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 implications of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.
As a bankruptcy professional in Australia, I have a fair share of knowledge when it concerns Going Bankrupt. And having dealt with countless bankruptcy cases in Australia I have never caught someone abusing the system or acting in a reckless way as to exploit the insolvency laws in Australia. When it comes to Going Bankrupt, each week I help a small business owner or entrepreneur suffer through the very hard task of bankruptcy, not once have I really felt they are happy about it. The normal small business owner or entrepreneur in Australia does not start out taking enormous financial risks with the intention 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 rejected of the game financially for financial decisions often out of their control. Most small business owners I help with Going Bankrupt, are hardworking, tax paying, companies keeping this country going.
There really is a fine line with the things the government is trying to do here, because they are trying to balance helping individuals who have made decisions out of their control, and preventing people from making blunders that land them in trouble and consequently an issue of Going Bankrupt. However you likewise don’t want to destroy the experience and knowledge that business owners have. You undoubtedly don’t want to shatter people simply because they have had a sincere failure in a large or small start-up project that has not gone well.
At the major 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 minimized because directors are troubled they’ll be personally liable in an insolvency arrangement if the new endeavor doesn’t work out.
The government’s proposed ‘safe haven’ changes for directors of companies will enable Australia to more fully explore and innovate, which will make big changes for Going Bankrupt. I can not imagine, that these refinements will be harmful to Australia’s economy, indeed 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 extensive. When it comes to Going Bankrupt in Australia not a day goes by where I don’t find out the tragic stories of relationship failures, thoughts of suicide and the list goes on.
Going Bankrupt helps save lives, and it could save yours. If you want some help with your debts in Australia or are just thinking of Going Bankrupt, feel free to contact us here at Bankruptcy Advice on 1300 795 575, we have offices in, Brisbane, Canberra, Sunshine Coast, Sydney, Melbourne, Gold Coast, Adelaide, Perth, Darwin and Hobart. or visit our website: www.bankruptcy-advice.com.au