Going Bankrupt in Australia – Changes that can help small business and entrepreneurs.
5th February 2016 – By Charles Bosse
Do you have knowledge of just how much Going Bankruptis changing? The Australian Government at the end of 2015 came up with some radical changes to the Bankruptcy Laws in Australia. One of 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, having said that, this 3 year period may very well be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be rather 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 improvements to the issue of Going Bankrupt will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that giving protection to family assets was necessary 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 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.”.
The debate surrounding this Going Bankrupt issue that some come up with is that this variation will only support fraudulent behavior opening pandora’s box so to speak for the unscrupulous to misuse of the bankruptcy system. We have looked into the minimum, but on the other side of the matter, The government is not suggesting to change the maximum term of 8 years if it deems a bankrupt has operated in an unethical or fraudulent way, and there are no propositions to change the repercussions of misrepresenting yourself or financial position when filing for bankruptcy in Australia.
As an insolvency professional, I have a fair share of experience when it concerns Going Bankrupt. And having dealt with countless bankruptcy cases I have never come across someone abusing the system or acting in a careless way as to exploit the bankruptcy laws in Australia. When it comes to Going Bankrupt, each week I help a small business owner or entrepreneur go through the very problematic task of bankruptcy, not once have I felt they are happy about it. The ordinary small business owner or entrepreneur does not start out taking enormous financial risks with the intent 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 proposed changes will be good for often the very best and brightest not get rejected of the game financially for financial decisions often outside of their control. Most small business owners I help with Going Bankrupt, are hardworking, tax paying, companies keeping this country going.
Now there is a fine line with what the government is trying to do here, because they are aiming to balance helping individuals who have made decisions out of their control, and discouraging people from making blunders that land them in trouble and therefore an issue of Going Bankrupt. However you likewise don’t want to get rid of the experience and knowledge that business owners have. You certainly don’t want to shatter people simply because they have had a genuine failure in a large or small start-up enterprise that has not panned out.
At the major end of town large well 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 reduced because directors are concerned they’ll be personally responsible in an insolvency arrangement if the new venture doesn’t work out.
The government’s suggested ‘safe haven’ changes for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Going Bankrupt. I can not imagine, that these developments will be damaging to Australia’s economy, in fact 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 extensive. When it comes to Going Bankrupt in Adelaide not a day goes by where I don’t find out the tragic stories of relationship failures, thoughts of suicide and the list continues.
Going Bankrupt helps save lives, and it could save yours. If you really need some assistance with your debts or are just considering Going Bankrupt, feel free to call us here at Bankruptcy Experts 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.bankruptcyexperts.com.au.