Bankruptcy in Canberra - Changes that can 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 in late 2015 urged some underlying 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. Currently, there is a minimum amount of time that you must remain bankrupt, having said that, this 3 year period may in fact be reduced down to just 12 months. So if you are asking about Bankruptcy, this news may be quite 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 modifications to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that giving protection to family assets was very important because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws discouraged 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.".

Fraudulent Behavior.

The debate surrounding this Bankruptcy issue in Canberra that some make is that this variation will only support fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to abuse of the bankruptcy system. We have looked into the minimum, but on the other side of the matter, The government is not proposing to change the maximum term of 8 years if it deems a bankrupt has behaved in an unethical or fraudulent way, and there are no plans to change the penalties of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As a bankruptcy professional in Canberra, I have a reasonable share of knowledge when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Canberra I have never uncovered someone abusing the system or acting in a careless way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur suffer through the very difficult task of bankruptcy, not once have I perceived they are happy about it. The standard small business owner or entrepreneur in Canberra does not start out taking enormous financial risks with the intent to fail. The media really loves citing the apparent misuse 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 most effective and brightest in Canberra not get kicked out of the game financially for financial decisions often outside of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, managers keeping this country going.

There really is a fine line with precisely what the government is trying to do here, since they are attempting to balance helping people who have made decisions out of their control, and dissuading people from making missteps that land them in trouble and consequently an issue of Bankruptcy. However you also don't want to wipe out the experience and knowledge that business owners have. You absolutely don't want to shatter people simply because they have had an honest failure in a large or small start-up project that has not panned out.

At the major end of town large developed companies have long been criticised for their failure to innovate - let’s face it they would be more likely to do so if the risks of insolvency were cut down because directors are concerned they'll be personally responsible in an insolvency arrangement if the new endeavour 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 updates for Bankruptcy. I cannot imagine, that these modifications will be destructive to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health sector because the emotional cost of bankruptcy is extensive. When it comes to Bankruptcy in Canberra not a day goes by where I don't find out the tragic experiences of relationship failures, thoughts of suicide and the list continues.

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 phone us here at Fresh Start Solutions Canberra on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-canberra