Written 15th March 2016 – By Charles Bosse– If checking this out greatly after this date, please review some of our various blog posts to establish the data is still up to date. Do you realise just how much Bankruptcy in Australia is going to be changing? The Australian Government at the end of 2015 came up with some extreme proposals and prospective alterations to the Bankruptcy Laws in Australia, particularly when it involves the duration 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 period may effectively be lowered to just 12 months. So if you are looking at insolvency, these changes are going to be relatively critical to you! How did this all come to be? 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 trouble is he aiming to repair? Presently, the legislations don’t have sufficient protections, to the extent that Mr Carnegie, continued to point out in the Financial Review that offering protection to family assets was required because “banks just terrorise small business and the mental health consequences to society are enormous”. The trouble is Australia’s bankruptcy laws deterred investors from supporting start-ups, and for that reason mentoring had been “driven out of the system” and several people are too troubled to try and invest or try to run a small 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 suggests that right now, the current legislations are costing the overall economy and they may benefit you, however they could be manipulated and in some cases the innocent fall in the gaps and get unjustly penalized. What is being proposed? The proposition is to have the 3 year bankruptcy duration decreased to just 12 months when there is zero sign of fraudulence or dishonest practices. These improvements will signify a lot for Bankruptcy and will likely take at the very least 18 months to apply. What is Fraudulent Behaviour? Fraudulent behaviour is effectively a term that includes all the bad things. So when it comes to Bankruptcy, this indicates that it will address behaving dishonestly, hiding assets, taking careless risks, acting unethically or just commonly trying to scam people. One proposed strategy is that although they are minimizing the time for those acting honestly, they could actually execute a counter proposition to target those behaving especially dishonestly and increase the amount of time. There are currently some regulations in place for when you do not comply with certain regulations (and I recommend you to read more about Bankruptcy to make sure you don’t accidentally break these guidelines) but it will be interesting to observe how this evolves. So is this a Win for Small Business? Yes, absolutely! This is going to be terrific for business and I really hope that you read these modifications to Bankruptcy and are getting as thrilled as I am. These suggested changes will be good for small businesses because it can urge additional individuals to get engaged and take estimated risks– There will however be consequences in effect, but it will not be unfairly punishing those who make truly honest mistakes. Many business owners I assist with Bankruptcy, are hardworking, tax paying, businesses that are helping keep this nation going and so I am delighted to see what will be occurring next with this, and how it will impact Bankruptcy. Bankruptcy helps save lives, and it could possibly save yours. If you really need some assistance with your debts in Australia or are just considering Bankruptcy, don’t hesitate to contact us here at Bankruptcy Australia on 1300 795 575, or visit our website: www.bankruptcy-australia.com.au
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