Take Care Of Your Staff
After your business has closed down you may still have obligations to your employees. PAYG, Fringe Benefits Tax, superannuation and Eligible Termination Payment final payments often need to be made even after the doors have closed.
Your employer responsibilities will differ depending on whether a worker is an employee or independent contractor. For detailed instructions on calculating all final payments for employees and independent contractors, use information from the the ATO’s When a worker leaves page.
If you’re making staff redundant there are support services available to help them retrain and find new work.
- visit the Jobs Victoria Workers in Transition page for further details
- encourage transitioning to employment by signing up with Sidekicker and start working for Victoria
Duty To Not Trade While Insolvent
You also have a duty to prevent your company trading if it is insolvent. A company is insolvent if it is unable to pay its debts when they fall due. Before you incur a new debt you must consider whether you have reasonable grounds to suspect the company is insolvent or will become insolvent as a result of incurring the debt.
An understanding of the financial position of your company when you sign off on the yearly financial statements is not enough. You need to be constantly aware of your companys financial position.
Regulatory Guide 217Duty to prevent insolvent trading: Guide for directors sets out guidance to help directors understand and comply with their duty under s588G of the Corporations Act.
How Is Equity Determined
This is the most vital part of this procedure. Why? Put simply, if you get it wrong you are going to lose your home. There are a number of things you must understand here. First of all, your gut reaction or assumption about the true worth of your property is probably generous. Most people expect their home is worth far more than it really is. When you declare bankruptcy the trustee may ask how you calculated the price for your house. In some cases they may ask for more detail about your valuation, possibly a rates notice, a real estate agencys appraisal or a registered valuation. A practical strategy would be to search www.realestate.com.au then click on the Sold tab on that particular site and look for the latest house sales in your street or neighbourhood. This will assist you to get some idea of the value of the market at the moment. Always remember, the valuation is based upon a fast sale not a sophisticated real estate agents marketing project. Understanding this step is vital, at Bankruptcy Experts we can give you guidance before moving on, call us on .
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How Long Will Selling The Home Take
Trustees will typically sell the home in a timely fashion. Generally, an individual remains bankrupt for 3 years. Trustees are required by law to sell a home within 6 years after an individuals bankuptcy ends. This allows 9 years to arrange the sale. If the trustee does not sell the home within this period, ownership of the home could be returned to the individual.
The 6 year rule only applies if the trustee is aware the home exists. If a home is not disclosed in the bankruptcy documents, the trustee will have 20 years to take possession and sell the home.
An Overview Of Bankruptcy Laws
What is bankruptcy? In bankruptcy the law provides protection to you, the borrower, when you are unable to repay your debts and a means to present a workable resolution to your creditors. If you cannot come to an informal or formal agreement to repay your debts with your creditor then you may want to proceed with bankruptcy. Bankruptcy can occur one of two ways, the most common situation is for the borrower to file voluntarily, which means providing the correct documentation and relying upon the provisions of the Bankruptcy Act to make the process happen. The other option is for one of your creditors to seek to have you declared bankrupt through the courts.
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Bankruptcy In Australia Explained
Bankruptcy in Australia is a subject that is often misunderstood. This article contains a very basic overview aims to clear up a few of the more common misconceptions about bankruptcy. You will also find some super useful resources at the bottom of this article where you get more detail about the process of bankruptcy and its consequences.
Did you know that your creditors could make you bankrupt with an amount as little as $3000? . If you declare bankruptcy or a court declares you bankrupt you could be listed on the NPII (National Personal Insolvency Index for life for an amount as little as the above. This can mean you may find it difficult or almost impossible to obtain credit for up to 5 years or more.
Bankruptcy and debt agreements in Australia are looked after by a government body called ITSA or the Insolvency and Trustee Service Australia.
Bankruptcy can sometimes solve financial problems but should only be considered as a last resort and never be considered before speaking to a insolvency professional or financial counsellor about your circumstances.
There are often other options besides bankruptcy to help Australians in debt.
You may want to weigh up your decision to declare bankruptcy first as the consequences can be serious.
Key Consequences :
How To Claim Bankruptcy
30 May 2014
If you feel you are unable to control your debts and cannot negotiate a reasonable and suitable arrangement with your creditors then bankruptcy may be your best option.
To declare bankruptcy in Australia you will need to meet various criteria and disclose specific information to your trustee. There are many reasons you may need to declare bankruptcy, but there are restrictions, concerns and aspects of bankruptcy which do have consequences and there are alternative to bankruptcy which may provide a better solution to your debt problems. Bankruptcy should be used as a last resort. It is designed to help people who simply can no longer afford to repay their debts. While the process of bankruptcy is straightforward, there are many legal consequences which you should know about..
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Before Doing Anything Else Decide If Filing Bankruptcy Is Right For You
Before jumping in, you need to determine whether filing bankruptcy will help you. Bankruptcy is a powerful debt relief tool that’s helped many people, but you’ll have to decide if it makes sense for your financial situation.
A bankruptcy discharge does not wipe out certain non-dischargeable debts like most student loans, child support obligations, alimony, and recent tax debts. If you have any cosigners, they will not be protected by your personal bankruptcy.
If you have great credit when your Chapter 7 bankruptcy is first filed, your . Most people are able to rebuild their credit and have a better score within a year of getting their bankruptcy discharge.
Anyone can file Chapter 7 bankruptcy without a lawyer. Here is an overview of the steps you’ll need to take to obtain your fresh start.
What To Do If You Suspect Financial Difficulty
If you suspect your company is in financial difficulty, get professional accounting and/or legal advice as early as possible. This increases the likelihood the company will survive. Do not take a head in the sand attitude, hoping that things will improve they rarely do. Warning signs of insolvency include:
- ongoing losses
- change of bank, lender or increased monitoring/involvement by financier
- inability to raise funds from shareholders
- overdue taxes and superannuation liabilities
- board disputes and director resignations, or loss of management personnel
- increased level of complaints or queries raised with suppliers
- an expectation that the next big job/sale/contract will save the company.
A registered liquidator can conduct a solvency review of your company and outline available options. You need to be aware of your options so you can make informed decisions about your companys future. Options may include refinancing, restructuring or changing your companys activities, or appointing an external administrator.
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What Does It Mean To Declare Bankruptcy
This is a process where you are legally declared unable to repay your debts.
If you enter bankruptcy yourself voluntarily, it is referred to as a debtor’s petition but you will have to be insolvent . You can also be made bankrupt by one of your creditors through a court process which is called a creditor’s petition.
What Is The Process For Declaring Bankruptcy
Step 1: lodge a petition to become bankrupt and a statement of affairs
If you are unable to pay your debts and cannot come to a suitable arrangement with your creditors, you may voluntarily choose to lodge an application to lodge a debtors petition to become bankrupt.
When you lodge your application, you must also lodge a statement of affairs.
Step 2: if the Australian Financial Security Authority accepts your application, you become bankrupt
Generally, AFSA processes the debtors petition and the statement of affairs within 24 to 48 hours.
When AFSA accepts the forms, you become bankrupt. You cannot change you mind after lodging your application.
Step 3: a trustee is appointed to administer the bankruptcy
A trustee is appointed to administer your bankruptcy.
If you become bankrupt, all your property automatically vests with the trustee. This includes property acquired during the bankruptcy period.
In order to pay your creditors, your trustee can:
- sell your assets
- recover any income over a certain limit
- investigate your financial affairs and, in certain circumstances, recover property that you have transferred to someone else before your bankruptcy.
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How Long Does Bankruptcy Last In Australia
Bankruptcy in Australia lasts for three years. The date bankruptcy ends depends upon whether you voluntarily apply for bankruptcy or a creditor applies to make you bankrupt.
If you voluntarily apply for bankruptcy to the AFSA, your bankruptcy will end three years and one day after your application is accepted.
If one or more of your creditors applies to the Courts to have you declared bankrupt, your bankruptcy will end three years and one day after the AFSA accepts your statement of affairs. This is a document that outlines your financial situation and other personal details.
A Guide To Bankruptcy Laws
30 May 2014
Are you considering declaring bankruptcy? Knowing the bankruptcy laws will help you make the right decisions about your financial future as well as your rights and responsibilities should you go bankrupt. If you can no longer afford to pay your creditors and are unable to service your debts, bankruptcy is an option you need to consider. However before you make a decision about bankruptcy you should consider what effects bankruptcy will have on your life now and in the future. While bankruptcy is there to help people rebuild their financial future and to provide a fresh start there are consequences.
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Limits And Procedures In Bankruptcy Law
There are no limits on how much you need to be in debt before you can file for bankruptcy. Nor are there any limits to the amount of property you own or the amount of income you earn which prevent you from filing for bankruptcy. To file for bankruptcy in Australia you must be an Australian resident residing in the country at the time of your insolvency or you must own a home or business in Australia.
Once you determine that you want to declare bankruptcy you should contact a register trustee to help you through the process. Legally, you must file all legal forms with AFSA, the government body which handles bankruptcy. The bankruptcy laws require that you file the following forms:.
- A Debtor’s Petition
- A Statement of Affairs
- An Acknowledgement that you have received and read the Prescribed Information
Once these documents have been completed you can begin the bankruptcy process. Depending on your income you may have to pay income contributions to service your bankruptcy. Additionally if you own property or a vehicle of a certain value, you may need to sell these assets and provide the proceeds to your trustee. In order to ascertain whether this is applicable to you, you should discuss your situation with a registered trustee or AFSA.
There are situations that you should take into consideration. While most creditors are unable to continue to collect a debt from you, some types of debt are not qualified for bankruptcy. These include:
Bankruptcy Normally Lasts For 3 Years And 1 Day From The Day We Accept Your Bankruptcy Form
Your bankruptcy period starts from the day we accept your bankruptcy application. If a creditor makes you bankrupt, the bankruptcy period starts from the date you file a statement of affairs that we accept. In some cases, your trustee can lodge an objection to extend the bankruptcy for up to eight years.
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How Can I Find Out When My Bankruptcy Ends
If your bankruptcy is administered by the Official Trustee , you can find out when your bankruptcy is expected to end by completing the End of bankruptcy enquiry online form available below.
If you bankruptcy is administered by a registered trustee, contact your trustee to find out your expected bankruptcy end date.
Insolvencies In Australia: A Tale Of Two Covids
When COVID-19 hit Australia in 2020, there were widespread fears about the economic impact of the health crisis, with a predicted avalanche of insolvencies. Many of us greeted 2021 with optimism, hoping for the world to open up as we adjusted to the new normal. Instead, the virulent Delta strain and snap state lockdowns are keeping the country on edge. While the health crisis continues, the economic crash has been largely avoided. Partners from our national Turnaround & Corporate Renewal team examine the economic landscape and offer their predictions for the year ahead.
It is a tale of two COVIDs, with stark differences between winners and losers. Generally, the effects of financial shocks are spread evenly. But, not for the first time, COVID-19 has shown us that history is no indicator of how pandemics will behave. Its economic effects have been unequal, creating clear winners and losers. For every café, restaurant or hotel that has been decimated, there has been a booming retail or transport business experiencing record profits. While the health crisis continues to challenge, the economic crisis seems to have been averted, despite the continuing uncertainty of snap lockdowns and state border closures.
KPMG Restructuring figures show that insolvency appointments continue to lag well below historic pre-COVID averages with 431 appointments in May 2021. However, they are tracking in line with COVID 2020 numbers .
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What If My House Is Mortgaged
Your trustee has to deal with any equity or interest you have in a property for the benefit of your creditors. This may mean that the property has to be sold. If the property is jointly owned the trustee may consider selling his interest in your property to a non-bankrupt joint owner. Alternatively, the joint owner provided they are not bankrupt may make an offer to purchase the trustee’s interest in the property.
How Have Lockdowns Affected Market Sentiment
At the time of writing, nearly 12 million people in Australias two most populous states, NSW and Victoria, were in extended lockdowns. South Australia also announced a week-long lockdown, effective from 20 July. Although Prime Minister Scott Morrison recently flagged a four-stage plan to get Australia back to normal, including using lockdowns as a last resort, the plan hinges on the success of a vaccine rollout. Until then, lockdowns and border closures are likely to remain with us.
David says the recent lockdowns have taken some of the optimism out of the market.
People are concerned now about long-term damage. While the whole world was going through lockdowns, we were all in the same boat. But now there are differences and it could have an impact on services that we export, like education. If you were an international student looking to study in either Australia or England, where would you choose? There might become a world question mark over doing business in Australia.
There is a great deal of frustration in the community in Sydney, says Mark Petrucco. Its the uncertainty and the mixed messages that are causing angst. The economy is treading water as opposed to a collapse. But the state government is trying to fast track infrastructure projects, to keep the economy moving, and they should be applauded for that, to the extent that the publics health is not put at risk.
But Hector says it is a different story in Western Australia.
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Proven Services And Solutions In Bankruptcy Advice For Clients From Sydney Brisbane And Perth
There are few things worse than facing financial insecurity, whether it is related to your personal income or business. It can be easier than we would like for debts to pile up to a point where we can no longer afford to pay them, while still having to contend with our usual day-to-day expenses.
That is why the staff here at Hamilton Murphy know how important it is to provide targeted and reliable advice on all bankruptcy matters, guiding our clients through the process and helping them reach an informed decision.
To speak with our team regarding our work in bankruptcy advice, Sydney, Perth, Brisbane and Melbourne-based clients simply have to get in touch with us today.
Payment Of Debts After Bankruptcy Declaration
When you enter bankruptcy, your declaration may clear most unsecured debts, such as credit cards, personal loans, unpaid rent and overdrawn bank accounts. This means that you no longer have to repay them.
However, bankruptcy doesnt cover debts such as child support, HECS/HELP and toll fines. This means youre still liable for these debts. You should contact your creditors directly to discuss payment options.
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