Do you have an
idea of how much Bankruptcy 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 Bankruptcy 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."
Fraudulent Behavior
The controversy
surrounding this Bankruptcy 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 Bankruptcy.
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 Bankruptcy, 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 Bankruptcy, 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 Bankruptcy. 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 Bankruptcy.
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 Bankruptcy 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.
Bankruptcy helps
save lives, and it could save yours. If you want some help with your debts in
Australia or are just thinking of Bankruptcy, feel free to contact us here at
Bankruptcy Advice on 1300 795 575, or visit our website:bankruptcy-advice.com.au
