Do you have
knowledge of how much BankruptcyAustralia is changing? The Australian Government in late 2015 urged some
progressive changes to the Bankruptcy Laws in Australia. 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, having said
that, this 3 year period may in fact be reduced to just 12 months. So if you
are inquiring 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 updates 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
important because "banks just terrorise small business and the mental
health consequences to society are enormous".
The problem is
Australia's bankruptcy laws put off 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 invite fraudulent behavior opening pandora's box so to
speak for the unscrupulous to misuse of the bankruptcy system. We have looked
at the minimum, but on the other side of the matter, The government is not
recommending to change the maximum term of 8 years if it deems a bankrupt has
appeared in an unethical or fraudulent way, and there are no propositions to
change the penalties of misrepresenting yourself or financial situation when
filing for bankruptcy in Australia.
As a bankruptcy
professional in Australia, I have a fair share of practical experience when it
concerns Bankruptcy. And having dealt with countless bankruptcy cases in
Australia I have never come across someone abusing the system or acting in a
careless way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy,
each week I help a small business owner or entrepreneur undergo the very
formidable task of bankruptcy, not once have I noticed they are happy about it.
The average small business owner or entrepreneur in Australia does not start
out taking enormous financial risks with the intent to fail. The media loves
citing the apparent abuse that will be rampant if these changes occur, what a
joke!
A Win for Small Business
These
recommended 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 outside of their control. Most small business owners I help with Bankruptcy,
are hardworking, tax paying, managers keeping this country going.
There really is
a fine line with what exactly the government is trying to do here, because they
are aiming to balance helping individuals who have made decisions out of their
control, and deterring people from making blunders that land them in trouble
and consequently an issue of Bankruptcy. However you also don't want to kill
the experience and knowledge that business owners have. You undoubtedly don't
want to shatter people simply because they have had an honest failure in a
large or small start-up project that has not panned out.
At the major end
of town large organized 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 lessened because directors are worried they'll be personally
accountable in an insolvency arrangement if the new endeavor doesn't work out.
The government's
proposed 'safe haven' modifications for directors of companies will allow
Australia to more fully explore and innovate, which will make big changes for Bankruptcy.
I cannot imagine, that these developments will be harmful to Australia's
economy, actually 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 enormous. When it comes to Bankruptcy in Australia not a day
passes where I don't hear the tragic stories 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 thinking about Bankruptcy, don't hesitate
to give us a call here at Bankruptcy Australia on 1300 795 575, or visit our
website: bankruptcy-australia.net.au
