Bankrupt, Declaring Bankruptcy, Bankruptcy
March 6, 2017 0

Bankruptcy in Australia – Changes that can help Small Business and Entrepreneurs.

Posted by:Charles Bosse onMarch 6, 2017

Written 15th March 2016 – By Charles Bosse – If reading this considerably after this time, feel free to go through a few of our other blog posts to establish the details is still up to date. Do you know just how much Bankruptcy in Australia is going to be changing? The Australian Government at the end of 2015 produced some radical plans and prospective changes to the Bankruptcy Laws in Australia, specifically when it relates to the length of bankruptcy. At the moment, there is a minimum quantity of time that you will need to remain bankrupt, having said that, this 3 year duration may well be lowered to just 12 months. So if you are looking at bankruptcy, these developments are going to be rather critical to you! How did this all come to be? Well, Mark Carnegie (an expert in this area) commented back in December 2015 in the Financial Review that there was going to be suggestions for “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”. What trouble is he attempting to resolve? Presently, the legislations don’t have adequate protections, to the extent that Mr Carnegie, proceeded to mention in the Financial Review that giving protection to household assets was needed because “banks just terrorise small business and the mental health consequences to society are enormous”. The issue is Australia’s bankruptcy laws deterred financiers from supporting start-ups, and therefore mentoring had been “driven out of the system” and several people are too worried to try and invest or try to run a business. “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”. This suggests that presently, the present legislations are costing the economy and they may work with you, but they could be manipulated and in some cases the innocent fall in the voids and get unjustly penalized. What is being proposed? The recommendation is to have the 3 year bankruptcy time period decreased to just 12 months when there is no sign of fraudulence or unethical practices. These developments will signify a lot for Bankruptcy and will likely take approximately 18 months to apply. What is Fraudulent Behaviour? Fraudulent behaviour is essentially a phrase that includes all of the bad things. So when it concerns Bankruptcy, this means that it will cover behaving dishonestly, concealing assets, taking negligent risks, acting unethically or just commonly attempting to scam others. One proposed strategy is that while they are minimizing the amount of time for those acting truthfully, they may actually execute a counter proposal to target those acting significantly dishonestly and raise the time. Certainly there are currently some provisions in effect for when you do not comply with particular rules (and I encourage you to read more about Bankruptcy to make sure you don’t accidentally break these guidelines) but it will be interesting to see how this evolves. So is this a Win for Small Business? Yes, definitely! This is going to be great for small business and I really hope that you are reading these modifications to Bankruptcy and are getting as thrilled as I am. These suggested changes will benefit local businesses because it will encourage more people to get involved and take calculated risks– There will however be consequences in effect, but it won’t be unfairly punishing individuals who make genuinely honest mistakes. Many business owners I help with Bankruptcy, are hardworking, tax paying, businesses that are helping keep this country going and so I am delighted to see what will be occurring next with this, and just how it will impact Bankruptcy. Bankruptcy helps save lives, and it could save yours. If you really require some assistance with your debts in Australia or are just thinking about Bankruptcy, do not hesitate to phone us here at Bankruptcy Experts on 1300 818 575, or visit our website: www.freshstartsolutions.com.au

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