Bankruptcy in Canberra - Will I lose my business if I go bankrupt?

When people in Canberra come to me trying to discuss Bankruptcy, they are constantly filled with questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it clearer. One of the most universal worries is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are an owner of a business any shape or size you can maintain your business if you want to. In Canberra, businesses that eventually are insolvent have a few options like liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complicated area so get some qualified advice on this one if you have a business. Generally speaking, the financial obligations in a business and personal debts go hand in hand when a business owner goes bankrupt. There are some significant implications for directors of companies when it pertains to Bankruptcy in Canberra: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to retire as a director as soon as you're bankrupt.

A limitation that applies when you are bankrupt as a business owner is that you may be in your own business as a sole trader only. Certainly there are things you need to reveal as an aspect of that but essentially you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For example, if you run a building company, your license will be suspended once you're bankrupt and therefore you can not trade without that license, so make sure you are asking the best questions when it involves licenses and Bankruptcy in Canberra.

But if your business is not impacted directly by such issues, then you'll will need to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your business, then go bankrupt then open the doors the next day like not a single thing had happened. There are laws in place to stop what is called phoenix companies growing out of the ashes of an old company.

Having said that, it's just a point of talking with the suitable people about Bankruptcy. In this circumstance you may think you need a liquidator for your company, and you could be right, but keep in mind that every liquidator is different and have their own motives. Liquidators make money from your liquidation - heaps of money - so exactly what advice do you believe you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is possibly risky as it can have very considerable implications for directors and business owners. This is since it is just one of those cases where what the right advice for one business owner is the incorrect advice for the other. There are some basics however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your distributors under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it concerns Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the appropriate advice ... If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Advice Canberra on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - does it matter if it is voluntary?

When it comes to Bankruptcy Canberra, often people aren't aware that there may be both voluntary, and involuntary bankruptcy - both of these have different methods and guidelines.

Involuntary bankruptcy arises when someone you owe money to applies to the court to declare you bankrupt. Generally when you get one of these particular notices, you have 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the paperwork in and after that you are bankrupt.

You can contest a bankruptcy notice by going to court immediately after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from the way you became bankrupt there is in fact no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're conducted to in the very same way.

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some tips and act on that advice. Generally I've found it's always far better to know what you can and can't do before you have an individual bankrupt you. Once you are bankrupt, it's normally far too late.

Voluntary Bankruptcy

Alternatively, when it comes to Bankruptcy, sometimes there are moments that it is the best option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for everybody of course, but normally I find that one way you could work it out is to figure out just how long it will take you to pay each one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may assist you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the level she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can really help you think this through. If you move house and forget to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will remain on your file for 5 years, so for $30 you can have your credit file seriously damaged for that period of time - and all of this will impact how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is vicious. The punishment doesn't seem to amount to the crime in my book. So if you currently have defaults on your credit report for 5 years, remember that bankruptcy is on your credit file for a total 7 years then its rubbed out completely.

So if your credit rating is a big aspect in trying to decide whether to take part in a Debt Agreement or Personal Insolvency Agreement or Bankruptcy remember they will all sit on your credit file for a total of 7 years. The biggest difference is that with a DA or PIA you pay back the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have mentioned the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element most people are afraid of when they come to me to discuss their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific country the arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared to countries like the United States, our bankruptcy laws are quite generous.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government believes the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which in turn costs the taxpayer anyway.

Bankruptcy wipes all of your debts including ATO debts with the exception of a few things:.

·         Centrelink Debts, Court Fines like parking and speeding fines.

·         HECS or Fee Help loans.

·         Money to pay for a car accident if the car was not insured.

There is far more that can be said about this and Bankruptcy in general but the objective of this blog was to help you decide between a few readily available options. When getting some advice, always remember that there are always options when it relates to Bankruptcy in Canberra, so do some study, and Good luck!

If you would like to learn more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to get in touch with Bankruptcy Advice Canberra on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - Will my income be altered if I go bankrupt?

Bankruptcy Canberra is a complicated process, and you should make sure you get the right recommendations. And when it comes to your income being affected, the answer to the question is maybe. The first thing you need to know about going bankrupt is there is no constraint on how much you can earn. However, I will say that your income is a significant consideration when working through when it comes to Bankruptcy.

The first thing you need to know about this area of Bankruptcy is how much you can earn before you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand quantity you earn annually. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can make an application for a hardship variation that increases the threshold amount, if you have financial strains in Canberra such as medical, child care, substantial travel to and from your job, or a situation where your spouse used to work but is not able to add to the family income.

Some of the intriguing parts of Bankruptcy is that your employer will not be notified when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also thought about, for example if you pay $5,000 child support each year and you have no dependents living with you then your modified net income limit will be $55,332.10.

There are more issues involving income and what is or isn't regarded as income - if you're uncertain, it's best to get experienced advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will be taken by the ATO while you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund so long as that doesn't take you over your threshold income caps.

If you think when it comes to Bankruptcy, your situation is more intricate, then just get professional advice in Canberra. I may seem like a broken record, but remember that it's always a smart idea to work through these options before declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.

If you would like to find out more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Advice Canberra on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - Choices, Choice, Choices

When it comes to Bankruptcy Canberra, there are a number of options that we get given depending on who we are, who we speak to, and exactly what has happened. Among the most common confusion I see with Bankruptcy is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Canberra, much of the info you receive on this subject matter will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can guarantee you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for assisting you wrap all of your credit card and personal loans into one neat and tidy package.

I hate to tell you this but they aren't going to be doing it for free. Please don't misunderstand me: if you feel your financial troubles in Canberra could be fixed by paying less interest, then go on and check out the choices. Even a small amount of interest saved over years easily adds up.

Generally I find if you read this blog you've undoubtedly attempted to consolidate your debts already and come to the following realisations similar to these:

• Your credit rating is not good, and your credit file definitely has defaults on it so no one will give you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving on a tiny bit of interest just won't make a lot of difference,.

• You've likely gotten to the point where you've had enough, you're emotionally drained, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

So when it relates to Bankruptcy in Canberra, what's the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Overall flexibility is the main thing Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee including the government trustee ITSA, and not a private business that advertises on TV. Ultimately this process is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they arrange a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets instead of cash. This may sound fine when it comes to the issues with Bankruptcy - that is up until you realize that one of the problems with PIA's is that 75 % of the people you owe money to have to come to an understanding the deal. If they do not, your proposal is rejected or must be renegotiated.

Generally people you owe money prefer all their money back plus interest. Sometimes they'll go for less than the amount you owe them - it's generally a percentage of the debt - but let me stress this part: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will actually settle for.

In many cases you'll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is decideded upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've come across creditors going for less 80 % on rare occasions, but that usually only occurs with a public company entering into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of brilliant lawyers and some very clever structures in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Canberra aren't going to get that lucky!

If you wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Advice Canberra on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - Are you going to get bitten?

When people in Canberra ask me about Bankruptcy, I tell them the timeless Native American Fable of the little boy and the Rattlesnake. An old rattlesnake asks a passing young boy to carry him to the mountain top to see one last sunset before he passes away. The boy was reluctant, but the rattlesnake promised not to bite him in exchange for the ride. They journeyed together only for the snake to ultimately bite the boy despite his vow not to do so. The snake's reply was 'You knew what I was when you picked me up.

Getting the right financial advice in Canberra when it concerns Bankruptcy is a whole lot like that little boy's journey, fraught with risk and danger, and normally skewed for the benefit of the individual providing the advice. In most cases you'll get bitten except if you know what you've picked up long before you move forward (avoid the rattlesnakes). I discovered the problem with receiving financial advice as a teenager, and it has been key to Bankruptcy. I'd been keeping my nose to the grindstone for a few years, and saved up a small amount of money I wanted to invest. It was the early 1980s so interest rates were very high and investing your money was rather profitable. I spent time researching varying investment options, and I went to visit a few financial advisors. It was clear that they had more money than I did: they had nice suits and plush offices, they all seemed to exude confidence and have all the solutions. What hit me was that they all had a very different strategy of what I should do. This confused me a lot that it put me off the whole idea of choosing any of them.

I'm sure currently you have read more than enough on the internet to be totally bewildered about Bankruptcy and exactly what to do. It would undoubtedly be easier for me to help you understand the nature of the financial snakes you might be picking up while you are attempting to get to the bottom of your financial problems in Canberra. Basically, you need to try and understand what your overarching options are, do your own research into where to proceed with your strategy for Bankruptcy, and after that approach what you feel is best in Canberra for your requirements. Essentially, you have 3 options for who to turn to.

The first option is a Solicitor - This may seem like the go-to possibility when you appear to be in trouble. But there is only so much aid they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their expertise comes with a hefty price.

Another choice you may consider is your accountant - they are incredibly helpful and vital to the process of running your business, but for the most part, when you are considering Bankruptcy, your accountant won't be much help to you anymore.

Your best bet? A Financial Counsellor that can talk about debt consolidation, personal insolvency agreements, and virtually all you should understand when it comes to Bankruptcy.

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Advice Canberra on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - Changes that help Small Business and Entrepreneurs

5th February 2016 - By Charles Bosse

Do you recognize just how much Bankruptcy in Canberra is changing? The Australian Government at the end of 2015 suggested some inherent changes to the Bankruptcy Laws in Australia. Among 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 remain bankrupt, but, this 3 year period may very well be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be pretty important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 proposed 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 alterations to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that safeguarding 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 prevented 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 argument around this Bankruptcy issue in Canberra that some come up with is that this change will only motivate 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 submitting 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 suggestions to change the repercussions of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As a bankruptcy professional in Canberra, I have a fair share of practical experience when it comes to Bankruptcy. And having dealt with countless bankruptcy cases in Canberra I have never come across someone abusing the system or acting in an irresponsible way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur suffer through the very tough task of bankruptcy, not once have I thought they are happy about it. The typical small business owner or entrepreneur in Canberra 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 suggested changes will be good for often the most effective and brightest in Canberra not get kicked out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, managers keeping this country going.

There certainly is a fine line with the things the government is trying to do here, since they are attempting to balance helping people who have made decisions out of their control, and discouraging people from making errors that land them in trouble and therefore an issue of Bankruptcy. However you likewise don't want to get rid of the experience and knowledge that business owners have. You surely don't want to shatter people simply because they have had a sincere failure in a large or small start-up venture that has not panned out.

At the big 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 insolvency were reduced because directors are distressed they'll be personally responsible in an insolvency arrangement if the new endeavor doesn't work out.

The government's proposed 'safe haven' changes for directors of companies will allow Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I can not imagine, that these refinements will be detrimental to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health field because the emotional cost of bankruptcy is extensive. When it comes to Bankruptcy in Canberra not a day passes 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 need some assistance with your debts in Canberra or are just considering Bankruptcy, feel free to contact us here at Bankruptcy Advice Canberra on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/canberra