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

When people in Sydney come to me seeking to speak about Bankruptcy, they are usually loaded with questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make things clearer. One of the very most standard troubles 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 Sydney, businesses that eventually become insolvent have a few options including liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

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

A limitation that applies when you are actually bankrupt as a business owner is that you may be in your very own business as a sole trader only. Certainly there are things you will want to make known as a part of that but generally you can still run your company. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. As an 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 ideal questions when it concerns licenses and Bankruptcy in Sydney.

However if your business is not impacted directly by such issues, then you'll 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 rack up heaps of debt in your business, then go bankrupt then open the doors the next day like nothing had happened. There are laws in place to prevent what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of talking to the right people about Bankruptcy. In this circumstance you may think you need a liquidator for your business, and you might be right, but keep in mind that every liquidator is distinct and have their own motives. Liquidators earn money from your liquidation - heaps of money - so what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is likely damaging as it can have very substantial implications for directors and business owners. This is because it is just one of those cases where what the right guidance for one business owner is the inappropriate advice for the other. There are some fundamentals however, that you may benefit from. There is no reduce to the size of the business you run while you are bankrupt. You can employ staff. You can continue to deal with your suppliers 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 extremely worried about what you can and can't do as a business owner, just get the right advice ... If you wish to learn more about what to do, precisely where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Advice Sydney on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Sydney .

Bankruptcy in Sydney - Are you going to get bitten?

When people in Sydney ask me about Bankruptcy, I tell them the simple 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 discover one last sunset before he passes away. The boy was hesitant, but the rattlesnake vowed not to bite him in exchange for the ride. They journeyed together only for the snake to eventually bite the boy despite his vow not to do so. The snake's answer was 'You knew what I was when you picked me up.

Obtaining the right financial advice in Sydney when it relates to Bankruptcy is a whole lot like that little boy's experience, fraught with risk and danger, and usually skewed for the benefit of the person presenting the advice. In many cases you'll get bitten unless you know what you've picked up long before you move forward (avoid the rattlesnakes). I discovered the problem with getting financial advice as a teenager, and it has been essential to Bankruptcy. I'd been working hard for a few years, and saved up a little bit of money I wanted to invest. It was the early 1980s so interest rates were very high and investing your money was very profitable. I spent time researching varying investment options, and I went to visit a few financial advisors. It was crystal clear that they had more money than I did: they had good suits and plush offices, they all seemed to exude confidence and have all the answers. What hit me was that they all had a truly different strategy of what I should do. This confused me so much that it put me off the entire idea of selecting any of them.

I'm sure currently you have read more than enough on the internet to be totally unclear about Bankruptcy and precisely what to do. It would most likely be easier for me to help you learn about the nature of the financial snakes you might be grabbing while you are attempting to get to the bottom of your financial issues in Sydney. In essence, you have to try and recognize what your overarching choices are, do your own research into where to proceed with your strategy for Bankruptcy, and then approach what you feel is best in Sydney for your requirements. Basically, you have 3 options for who to turn to.

The first option is a Solicitor - This may appear like the go-to choice when you seem to be in trouble. But generally there is only so much assistance they can give on this matter. There are definitely specialist legal advisors in bankruptcy, but their experience features a hefty price.

Another choice you may consider is your accountant - they are incredibly useful and vital to the task of operating your business, but for the most part, when you are thinking about Bankruptcy, your accountant won't be much help to you any longer.

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

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

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

When it comes to Bankruptcy Sydney, quite often people aren't aware that there may be both voluntary, and involuntary bankruptcy - both of these have different approaches and policies.

Involuntary bankruptcy occurs when a person you owe money to applies to the court to declare you bankrupt. Normally when you get one of these notices, you have normally 21 days to pay all the debt. If you don't, then the creditor goes back to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the documentation in then afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court 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 distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen to in the exact same way.

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

Voluntary Bankruptcy

On the other hand, when it comes to Bankruptcy, sometimes there are times that it is the most ideal option. So you may have to ask yourself, 'when should I consider voluntary Bankruptcy?'.

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

Once, I had an 80 year old pensioner, who came to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the rate she was paying 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 fail to remember to pay your $30 phone bill for 6 months more, it's very likely the phone service will default your credit file. That default will sit 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 need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unjust. The punishment doesn't seem to match the crime in my book. So if you already 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 element in trying to decide whether to participate 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 variation 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 part more 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 provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. As compared to countries like the United States, our bankruptcy laws are very reasonable.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. Nowadays I suppose the government feels 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 costs the taxpayer anyway.

Bankruptcy wipes all 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 actually insured.

There is a lot more that can be said about doing 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 possibilities when it relates to Bankruptcy in Sydney, so do some research, and Good luck!

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

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

Bankruptcy Sydney is a challenging process, and you should ensure you get the right suggestions. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have to know about going bankrupt is there is no limitation on how much you can earn. However, I will say that your income is a considerable consideration when working through when it comes to Bankruptcy.

The first thing you need to understand about this area of Bankruptcy is the amount 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 sum 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 request a hardship variation that increases the threshold amount, if you have costs in Sydney such as medical, child care, significant travel to and from work, or a situation where your spouse used to work but is no longer able to add to the household income.

Some of the useful parts of Bankruptcy is that your employer will not be alerted when you file for bankruptcy. Also, Child support is always taken into consideration 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 give $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.

There are many more issues surrounding income and what is or isn't regarded as income - if you're not exactly sure, it's a good idea to get professional advice. The reason you have to consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

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

If you feel like when it comes to Bankruptcy, your issue is more complex, then please get specialist advice in Sydney. I may sound 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 too late to change your mind.

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

Bankruptcy in Sydney - Choices, Choice, Choices

When it comes to Bankruptcy Sydney, there are a great deal of choices that we get given depending on who we are, who we approach, and what exactly has happened. 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 Sydney, most of the information you receive on this topic will reflect the interests of the advice giver. Therefore, if you call a debt consolidation company, I can guarantee you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very basic way: charging you a fee for aiding you wrap each of your credit card and personal loans into one neat and tidy bundle.

I hate to tell you this but these guys aren't doing it free of charge. Please do not misunderstand me: if you think your financial issues in Sydney might be solved by paying less interest, then go on and investigate the choices. Even a tiny amount of interest saved over years quickly adds up.

Typically I find if you read this blog you've undoubtedly tried to consolidate your debts already and come to the following realisations like 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 little bit of interest simply won't make a lot of difference,.

• You've most probably reached the stage where you've had enough, you're emotionally fatigued, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

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

Freedom is the main point Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - may I add - regulated trustee including the government trustee ITSA, and not a private agency that advertises on TV. Ultimately this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they negotiate a deal on your behalf. You can give a lump sum settlement figure or enter into a payment plan, or perhaps you can offer them assets as an alternative to cash. This can sound okay when it comes to the complications with Bankruptcy - that is up until you realise that one of the problems with PIA's is that 75 % of the people you owe money to will have to come to an understanding the deal. If they don't, your proposal is rejected or must be renegotiated.

Generally people you owe money want all their money back and also interest. Sometimes they'll opt for less than the amount you owe them - it's generally a percentage of the debt - but let me stress this aspect: 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 truly 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 choosing 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 clever 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 Sydney aren't going to get that lucky!

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

Bankruptcy in Sydney - Changes that help Small Business and Entrepreneurs

Do you have knowledge of just how much Bankruptcy in Sydney is changing? The Australian Government at the end of 2015 submitted some radical changes to the Bankruptcy Laws in Australia. Among the most significant of these is the length of time that a person is bankrupt for. At the moment, there is a minimum amount of time that you must remain bankrupt, but, this 3 year period may in fact be reduced to just 12 months. So if you are asking about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 suggested 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 improvements 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 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 debate around this Bankruptcy issue in Sydney that some make is that this change will only invite fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to violation of the bankruptcy system. We have looked at the minimum, but on the other side of the matter, The government is not suggesting 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 recommendations to change the consequences of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As a bankruptcy professional in Sydney, I have a reasonable share of practical experience when it comes to Bankruptcy. And having dealt with countless bankruptcy cases in Sydney 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 undergo the very challenging task of bankruptcy, not once have I felt they are happy about it. The standard small business owner or entrepreneur in Sydney does not start out taking enormous financial risks with the intention to fail. The media really loves citing the apparent wrongdoing 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 Sydney not get tossed 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, employers 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 individuals who have made decisions out of their control, and dissuading people from making blunders that land them in trouble and therefore 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 worked out.

At the major 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 bankruptcy were minimized because directors are troubled they'll be personally accountable in an insolvency arrangement if the new endeavour doesn't work out.

The government's suggested 'safe haven' changes for directors of companies will enable Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I cannot imagine, that these variations will be destructive to Australia's economy, in fact these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health industry because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Sydney not a day passes where I don't hear the tragic experiences of relationship failures, thoughts of suicide and the list goes on.

Bankruptcy helps save lives, and it could save yours. If you want some assistance with your debts in Sydney or are just considering Bankruptcy, don't hesitate to contact us here at Bankruptcy Advice Sydney on 1300 879 867, or visit our website: WWW.bankruptcy-advice.com.au/sydney.