Bankruptcy in Sydney – Changes that can help Small Business and Entrepreneurs.
Written 15th March 2016 – By Charles Bosse– If reading this considerably after this time, feel free to read through some of our additional blog posts to validate the data is still up to date. Do you know just how much Bankruptcy in Sydney is likely to be changing? The Australian Government by the end of 2015 produced some extreme propositions and possible modifications to the Bankruptcy Laws in Australia, specifically when it relates to the length of bankruptcy. At the moment, there is a minimal amount of time that you will need to remain bankrupt, having said that, this 3 year duration may very well be decreased to just 12 months. So if you are looking into insolvency, these changes are going to be relatively critical to you! How did this all happen? Well, Mark Carnegie (an expert in this field) 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 complication is he aiming to fix? At the moment, the legislations don’t have adequate protections, to the level that Mr Carnegie, continued to mention in the Financial Review that providing security to household assets was essential because “banks just terrorise small business and the mental health consequences to society are enormous”. The trouble is Australia’s bankruptcy laws prevented financiers from supporting start-ups, and for that reason mentoring had been “driven out of the system” and several individuals are too anxious 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”. That means that currently, the current rules are costing the overall economy and they may work with you, however they could be manipulated and in some cases the innocent fall in the voids and get unfairly punished. What is being proposed? The recommendation is to get the 3 year bankruptcy time period minimized to just 12 months when there is zero indication of fraud or dishonest behaviour. These improvements will signify a lot for Bankruptcy and will likely take approximately 18 months to apply. What is Fraudulent Behaviour? Fraudulent behaviour is effectively a term that covers all of the bad things. So when it involves Bankruptcy, this means that it will address acting dishonestly, hiding assets, taking reckless risks, acting unethically or just commonly trying to con people. One proposed idea is that whilst they are reducing the amount of time for those individuals acting honestly, they may in fact implement a counter proposition to target those behaving significantly dishonestly and increase the time. There are already some regulations in place for when you do not observe particular guidelines (and I encourage you to read more about Bankruptcy to make sure you don’t inadvertently break these rules) but it will be interesting to see exactly how this develops. So is this a Win for Small Business? Yes, definitely! This is going to be terrific for business and I really hope that you are reading these modifications to Bankruptcy and are getting as excited as I am. These recommended modifications will be good for businesses because it can encourage additional individuals to get engaged and take estimated risks– There will nonetheless be penalties in effect, but it will not be unfairly penalizing people who make genuinely honest mistakes. Most small business owners I help with Bankruptcy, are hardworking, tax paying, companies that are keeping this nation going and so I am delighted to observe what will be happening next with this, and just how it will affect Bankruptcy. Bankruptcy helps save lives, and it could possibly save yours. If you really require some support with your financial obligations in Sydney or are just thinking about Bankruptcy, don’t hesitate to contact us here at Bankruptcy Experts Sydney on 1300 795 575, or visit our website: www.bankruptcyexpertssydney.com.au