Bankruptcy in Hobart - Who do I talk to?

Should I speak with my accountant about Bankruptcy?

The answer seems clear doesn't it: if anybody knows your financial situation well in Hobart, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant does not have your best interests at heart when it comes to Bankruptcy, it's that his specialization lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will spend hardly any to no time on bankruptcy, it's generally done as a post graduate speciality program for those who intend to work in the field. Unless your accountant is an insolvency specialist, he won't know that a lot about the effects of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Hobart, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I consult with my Solicitor about Bankruptcy?

No! You can talk to your solicitor in Hobart but more than likely it won't do you much good. Solicitors are definitely good at doing things lawyers do, like helping you do your Will and buying your house and trying to keep you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Hobart often tend to have either a legal or accounting background, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just as there are a small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay a sizeable price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to aid you through this, they have no hidden agendas and they're a delightful option for letting you analyze your circumstance when it comes to Bankruptcy. If you find yourself freaking out constantly, not sleeping, not eating or over-eating and thinking about money pressures at all times, then get some help.

There are also charities around Hobart like Lifeline that offer a wonderful service. They will be a sounding board if you just need someone to review with you what your choices are. Don't let your financial issue destroy your life - in the end it's just money.

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

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

When people in Hobart come to me planning to discuss Bankruptcy, they are typically packed with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things clearer. One of the very most common concerns is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are an owner of a company any shape or size you can keep your business if you wish to. In Hobart, businesses that are insolvent have a few options for example, liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some expert advice on this one if you have a business. Generally speaking, the debts in a business and personal debts go hand in hand when a business owner goes bankrupt. There are some vital implications for directors of companies when it pertains to Bankruptcy in Hobart: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to need to retire as a director once you're bankrupt.

A restriction that applies when you are actually bankrupt as a business owner is that you can be in your own business as a sole trader only. Certainly there are things you will want to make known as a part of that but in essence you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For instance, if you run a building company, your license will be suspended once you're bankrupt and consequently you can not trade without that license, so make sure you are asking the appropriate questions when it involves licenses and Bankruptcy in Hobart.

Having said that 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 acquire heaps of debt in your business, then go bankrupt and then open the doors the next day like not a single thing had happened. There are laws in place to avoid what is called phoenix companies appearing out of the ashes of an old company.

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

When it comes to Bankruptcy, I consider that giving generic advice in this area is essentially harmful as it can have very significant implications for directors and business owners. This is because it is just one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some principles 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 comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the appropriate advice ... If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Advice Hobart on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Hobart .

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

When it comes to Bankruptcy Hobart, typically people aren't aware that there can be both voluntary, and involuntary bankruptcy - the two have unique approaches and guidelines.

Involuntary bankruptcy arises when somebody you owe money to involves the court to declare you bankrupt. Typically when you get one of those notices, you have 21 days to pay all the debt. If you do not, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documentation in and then you are bankrupt.

You can challenge a bankruptcy notice by going to court shortly 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 difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're conducted to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this process is incredible. If you think you are prone to be made bankrupt by someone, get some guidance 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 too late.

Voluntary Bankruptcy

Alternatively, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

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

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the level she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and forget to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file truly damaged for that period of time - and all of this will affect how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unreasonable. The punishment doesn't seem to equate to the crime in my book. So if you already have defaults on your credit report for 5 years, keep in mind 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 issue 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 contrast is that with a DA or PIA you repay the money and still have it on your file for 7 years.

Bankruptcy

I have talked about 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 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. Compared with countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government thinks 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 every one of 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 far more that can be said about this and Bankruptcy in general but the objective of this blog was to help you decide between a few available options. When getting some advice, bear in mind that there are always options when it involves Bankruptcy in Hobart, so do some investigation, and Good luck!

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

Bankruptcy in Hobart - Will my income be changed if I go bankrupt?

Bankruptcy Hobart is a intricate process, and you need to be sure you get the right guidance. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you need to know about going bankrupt is there is no limit on how much you can earn. However, I will mention that your income is a significant consideration when working through when it comes to Bankruptcy.

The first thing you need to keep in mind about this area of Bankruptcy is how much you can earn efore you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand portion you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can look for a hardship variation that raises the threshold amount, if you have expenses in Hobart such as medical, child care, significant travel to and from work, or a circumstance where your spouse used to work but is not able to contribute to the household income.

Some of the intriguing parts of Bankruptcy is that your employer will not be told when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you give $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

There are more issues involving income and what is or isn't considered income - if you're not sure, it's ideal to get qualified advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will be taken by the ATO whilst you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund just as long as that doesn't take you over your threshold income limitations.

If you feel like when it comes to Bankruptcy, your situation is more intricate, then simply get specialist advice in Hobart. I may seem like a broken record, but bear in mind that it's always a smart idea to overcome these options prior to declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.

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

Bankruptcy in Hobart - Choices, Choice, Choices

When it comes down to Bankruptcy Hobart, there are a number of options that we get given depending upon who we are, who we speak to, and what exactly has happened. Among the most common trouble 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 Hobart, much of the help and advice you receive on this matter will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can assure you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for aiding you wrap most of your credit card and personal loans into just one neat and tidy bundle.

I hate to tell you this but these guys aren't doing it free of charge. Please don't misunderstand me: if you feel your financial problems in Hobart might be solved by paying less interest, then go on and look into the options. Even a small amount of interest saved over years easily adds up.

Usually I find if you are reading this blog you've undoubtedly attempted to consolidate your debts already and come to the following realisations similar to these:

• Your credit rating is no good, and your credit file definitely has nonpayments on it so not a single person will offer you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving a small amount of interest just won't make a great deal of difference,.

• You've quite possibly gotten to the stage where you've had enough, you're mentally worn down, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

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

Freedom is the main thing 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 business that advertises on TV. Ultimately this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these experts work out a deal in your place. You can offer a lump sum settlement figure or enter into a payment plan, or maybe you can offer them assets as an alternative to cash. This might sound acceptable when it comes to the problems with Bankruptcy - that is up until you discover that one of the problems with PIA's is that 75 % of the people you owe money to must agree on the deal. If they do not, your proposal is denied or has to be renegotiated.

Generally people you owe money want all their money back in addition to interest. Sometimes they'll opt for less than the amount you owe them - it's normally a percentage of the debt - but allow me to 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 in fact settle for.

Most of the time 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 agreed 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 heard of creditors going for less 80 % on rare occasions, but that usually only occurs with a public company going 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 wise lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Hobart aren't going to get that lucky!

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

Bankruptcy in Hobart - Are you going to get bitten?

When people in Hobart ask me about Bankruptcy, I tell them the timeless 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 see one last sunset before he dies. The boy was reluctant, but the rattlesnake vowed not to bite him in exchange for the ride. They travelled together only for the snake to ultimately attack the boy despite his promise not to do so. The snake's reply was 'You knew what I was when you picked me up.

Getting the right financial advice in Hobart when it comes to Bankruptcy is a great deal like that little boy's encounter, laden with risk and danger, and usually skewed for the benefit of the individual presenting the advice. Often 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 fundamental to Bankruptcy. I'd been keeping my nose to the grindstone for a few years, and saved up a small amount of money I wanted to invest. It was the early 1980s so interest rates were quite high and investing your money was quite profitable. I spent some time researching assorted investment options, and I went to visit a few financial advisors. It was obvious 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 solutions. What hit me was that they all had a very different idea of what I should do. This confused me a lot that it put me off the whole idea of going with any of them.

I'm sure currently you have read enough on the internet to be totally lost about Bankruptcy and exactly what to do. It would undoubtedly be easier for me to help you understand the nature of the financial snakes you might be grasping while you are attempting to get to the bottom of your financial issues in Hobart. Essentially, you have to try and recognize what your overarching alternatives are, do your own research into where to proceed with your plan for Bankruptcy, and after that approach what you feel is best in Hobart for your requirements. Essentially, you have 3 options for who to turn to.

The first option is a Solicitor - This may seem the go-to option when you appear to be in trouble. But generally there is only just so much aid they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their expertise includes a hefty price.

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

Your best option? A Financial Counsellor that can outline debt consolidation, personal insolvency agreements, and pretty much all you have to know when it comes to Bankruptcy.

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

Bankruptcy in Hobart - Changes that help Small Business and Entrepreneurs

5th February 2016 - By Charles Bosse

Do you appreciate how much Bankruptcy in Hobart is changing? The Australian Government in late 2015 put forward some inherent 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 continue to be bankrupt, having said that, this 3 year period may in fact be reduced down to just 12 months. So if you are inquiring about Bankruptcy, this news may be fairly 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 protecting 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 put off 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 surrounding this Bankruptcy issue in Hobart that some make is that this change will only support fraudulent behavior opening pandora's box so to speak for the unscrupulous to abuse of the bankruptcy system. We have considered 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 represented oneself 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 an insolvency professional in Hobart, I have a reasonable share of knowledge when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Hobart I have never caught someone abusing the system or acting in an unaccountable way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur undergo the very hard task of bankruptcy, not once have I felt they are happy about it. The normal small business owner or entrepreneur in Hobart does not start out taking enormous financial risks with the intent to fail. The media prefers citing the apparent misuse 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 best and brightest in Hobart 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, employers keeping this country going.

There really is a fine line with just what the government is trying to do here, because they are trying to balance helping people who have made decisions out of their control, and discouraging people from making errors that land them in trouble and therefore an issue of Bankruptcy. However you likewise don't want to kill the experience and knowledge that business owners have. You definitely don't want to smash people simply because they have had a sincere failure in a large or small start-up project that has not gone well.

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 decreased because directors are distressed they'll be personally liable in an insolvency arrangement if the new endeavor doesn't work out.

The government's proposed 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I can not imagine, that these adjustments will be harmful to Australia's economy, in fact 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 substantial. When it comes to Bankruptcy in Hobart not a day passes where I don't find out 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 are in need of some help with your debts in Hobart or are just thinking about Bankruptcy, feel free to phone us here at Bankruptcy Advice Hobart on 1300 879 867, or visit our website: bankruptcy-advice.com.au/hobart