Bankruptcy in Hobart - Who do I talk to?

Should I consult with my accountant about Bankruptcy?

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

Most accounting degrees will put in very little to no time on insolvency, it's generally performed as a post graduate specialty program for those who want to work in the field. Unless your accountant is an insolvency specialist, he won't know that a lot about the implications 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 tend to be large firms with very nice office spaces who charge accordingly.

Should I consult with my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Hobart but more than likely it won't do you much good. Solicitors are certainly good at carrying out things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Hobart will have either a legal or accounting qualifications, and the 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 like there are a small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay a substantial price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to aid you with this, they have no hidden agendas and they're a superb option for helping you think through your situation when it comes to Bankruptcy. If you find yourself stressing out constantly, not sleeping, not eating or over-eating and thinking about money pressures constantly, then get some help.

There are also charitable organizations around Hobart like Lifeline that offer a fantastic service. They will be a sounding board if you just need someone to discuss with you what your possibilities are. Don't let your financial problem destroy your life - in the end it's just money.

If you would like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to get in touch with Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart

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

When people in Hobart come to me looking to talk about Bankruptcy, they are always 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 most simple problems is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are an owner of a company any shape or size you can keep your business if you want to. In Hobart, businesses that eventually become insolvent have a few options like liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some qualified 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 declares bankruptcy. There are a few crucial 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 will need to resign as a director soon after you're bankrupt.

A restriction that applies when you are bankrupt as a business owner is that you may be in your own business as a sole trader only. Certainly there are things you should reveal as an aspect of that but basically 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 ideal questions when it comes to licenses and Bankruptcy in Hobart.

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 acquire heaps of debt in your company, then go bankrupt and afterwards open the doors the next day like almost nothing had happened. There are laws in place to stop what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of talking with the right people about Bankruptcy. Here in this circumstance you may believe you need a liquidator for your company, and you might be right, but bear in mind that every liquidator is unique 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 believe that giving generic advice in this area is possibly dangerous as it can have very serious implications for directors and business owners. This is due to the fact that it is one of those cases where what the right advice for one business owner is the incorrect advice for the other. There are some basics however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your providers 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 too stressed about what you can and can't do as a business owner, just get the appropriate advice ... If you wish to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to call Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-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 - each have unique methods and policies.

Involuntary bankruptcy happens when somebody you owe money to involves the court to declare you bankrupt. Generally when you get one of those notices, you have actually 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the paperwork 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. Other than the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're managed to in the exact same way.

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

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are moments that it is the most effective 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 basically I find that one way you could work it out is to figure out 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 serve to 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 rate she was paying 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 overlook to pay your $30 phone bill for 6 months more, it's very likely the phone 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 seriously 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 wrong. The punishment doesn't seem to amount to 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 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 stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part most 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 arrangements 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 really 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 assumes 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 in turn 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 far more that can be said about doing this and Bankruptcy in general but the purpose of this blog was to help you decide between a few readily available options. When getting some advice, always remember that there are always alternatives when it comes to Bankruptcy in Hobart, so do some groundwork, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Fresh Start Solutions Hobart on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Hobart

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

Bankruptcy Hobart is a confusing process, and you should ensure you get the right recommendations. 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 restriction on how much you can earn. However, I will point out that your income is a significant consideration when working through when it comes to Bankruptcy.

The very 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 amount of money 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 apply for a hardship variation that increases the threshold amount, if you have financial commitments in Hobart like medical, child care, significant travel to and from work, or a situation where your partner used to work but is not able to contribute to the family income.

Some of the insightful parts of Bankruptcy is that your employer will not be notified 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 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 much more issues encompassing income and what is or isn't thought of as income - if you're not sure, it's ideal to get qualified advice. The reason you need 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 will likely 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 just as long as that doesn't take you over your threshold income caps.

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

If you wish to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Fresh Start Solutions Hobart on 1300 818 575, or go to our website: freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Choices, Choice, Choices

When it comes to Bankruptcy Hobart, there are a number of choices that we get given depending upon who we are, who we talk to, and just what has gone wrong. One of the most common trouble I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Hobart, a lot of the info you receive on this topic will reflect the interests of the advice giver. That is why, if you call a debt consolidation firm, I can promise 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 assisting you wrap every one of your credit card and personal loans into a single neat and tidy bundle.

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

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

• Your credit rating is not good, and your credit file already has defaults on it so no one will offer you a loan, consolidated or otherwise,.

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

• You've quite possibly arrived at the point where you've had more than enough, you're emotionally worn down, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.

Personal Insolvency Agreements

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

Adaptability is the main point Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee featuring the government trustee ITSA, and not a private company 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 negotiate a deal in your place. You can give a lump sum settlement figure or enter into a payment plan, or 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 obstacles with PIA's is that 75 % of the people you owe money to will need to agree on the deal. If they don't, your proposal is rejected or ought to be renegotiated.

Generally the people you owe money want all their money back as well as interest. Sometimes they'll opt for beneath the amount you owe them - it's normally a percentage of the debt - but let me stress this part: 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.

In many cases you'll have to pay back 100 % of the debt owed. This is not 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 settling for 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 brilliant 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 Hobart aren't going to get that lucky!

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Hobart on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Are you going to get bitten?

When people in Hobart ask me about Bankruptcy, I tell them the time-honored 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 promised not to bite him in exchange for the ride. They travelled together only for the snake to ultimately bite the boy despite his vow not to do so. The snake's reply was 'You knew what I was when you picked me up.

Obtaining the right financial advice in Hobart when it comes to Bankruptcy is a great deal like that little boy's encounter, filled with risk and danger, and generally skewed for the benefit of the person offering the advice. Often you'll get bitten except if you know what you've picked up long before you move forward (avoid the rattlesnakes). I discovered the problem with obtaining financial advice as a teenager, and it has been vital 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 rather profitable. I spent a few years researching several investment options, and I went to visit a few financial advisors. It was transparent that they had more money than I did: they had great 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 strategy of what I should do. This confused me a lot that it put me off the entire idea of choosing any of them.

I'm sure currently you have read more than enough on the internet to be totally bewildered about Bankruptcy and exactly what to do. It would probably be easier for me to help you understand the nature of the financial snakes you could be grabbing while you are trying to get to the bottom of your financial issues in Hobart. Essentially, you need to try and figure out 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 needs. Basically, you have 3 options for who to turn to.

The first option is a Solicitor - This may seem like the go-to approach when you seem to be in trouble. But there really is only just so much assistance they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their knowledge comes along with a hefty price.

Another choice you may think of is your accountant - they are incredibly helpful 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 anymore.

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

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.

Bankruptcy in Hobart - Changes that can help Small Business and Entrepreneurs

Do you recognize just how much Bankruptcy in Hobart is changing? The Australian Government at the end of 2015 came up with some innate 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. At this time, there is a minimum amount of time that you must stay bankrupt, having said that, this 3 year period may very well be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be quite 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 changes to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding family assets was necessary because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws deterred 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 Hobart that some make is that this variation will only encourage fraudulent behavior opening pandora's box so to speak for the unscrupulous to violation of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not proposing 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 effects 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 concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Hobart I have never struck someone abusing the system or acting in an irresponsible 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 challenging 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 injustice 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 tossed out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, employers keeping this country going.

Now there is a fine line with the things the government is trying to do here, because they are trying to balance helping individuals who have made decisions out of their control, and preventing people from making miscalculations that land them in trouble and as a result an issue of Bankruptcy. However you also don't want to get rid of the experience and knowledge that business owners have. You surely don't want to shatter people simply because they have had a genuine failure in a large or small start-up project that has not succeeded.

At the major 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 cut down because directors are concerned they'll be personally responsible in an insolvency arrangement if the new project doesn't work out.

The government's proposed '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 alterations will be detrimental to Australia's economy, indeed 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 Hobart not a day passes where I don't hear 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 help with your debts in Hobart or are just thinking of Bankruptcy, don't hesitate to contact us here at Fresh Start Solutions Hobart on 1300 818 575, or visit our website: WWW.freshstartsolutions.com.au/bankruptcy-hobart