Do you know how much Bankruptcy in Perth is changing? The Australian Government in late 2015 recommended some foundational changes to the Bankruptcy Laws in Australia. The most significant of these is the length of time that a person is bankrupt for. Now, there is a minimum amount of time that you must remain bankrupt, however, this 3 year period may very well be reduced to just 12 months. So if you are asking 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 modifications 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 essential 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 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 issue about this Bankruptcy issue in Perth that some come up with is that this modification will only strengthen fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to misuse of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not submitting 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 proposals to change the consequences of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.
As an insolvency professional in Perth, I have a fair share of knowledge when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Perth I have never uncovered someone abusing the system or acting in a reckless way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur look at the very problematic task of bankruptcy, not once have I felt they are happy about it. The average small business owner or entrepreneur in Perth does not start out taking enormous financial risks with the intention to fail. The media really 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 best and brightest in Perth not get rejected of the game financially for financial decisions often outside of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, companies keeping this country going.
Certainly there is a fine line with just what the government is trying to do here, because they are attempting 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 surely don't want to smash people simply because they have had a genuine failure in a large or small start-up venture that has not gone well.
At the big end of town large developed 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 scaled down because directors are troubled they'll be personally liable 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 Bankruptcy. I cannot imagine, that these changes 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 field because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Perth not a day goes by where I don't hear 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 help with your debts in Perth or are just considering Bankruptcy, don't hesitate to call us here at Bankruptcy Experts Perth on 1300 795 575, or visit our website: www.bankruptcyexpertsperth.com.au