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.