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Written 15th March 2016 – By Charles Bosse– If reading this significantly after this time, please go through some of our additional blogs to establish the data is still up to date. Do you know just how much Bankruptcy in Hervey Bay is likely to be changing? The Australian Government at the end of 2015 produced some extreme plans and possible changes to the Bankruptcy Laws in Australia, specifically when it concerns the duration of bankruptcy. At the moment, there is a minimum amount of time that you need to stay insolvent, having said that, this 3 year period may well be lowered to just 12 months. So if you are looking into going bankrupt, these developments are going to be relatively significant to you! How did this all come to be? Well, Mark Carnegie (an expert in this field) commented back in December 2015 in the Financial Review that there was going to be recommendations for “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”. What problem is he attempting to fix? Currently, the laws don’t have enough protections, to the level that Mr Carnegie, continued to point out in the Financial Review that giving protection to family assets was needed because “banks just terrorise small business and the mental health consequences to society are enormous”. The issue is Australia’s bankruptcy laws deterred financiers from supporting start-ups, and therefore mentoring had been “driven out of the system” and too many people are too troubled to try and invest or try to run a small business. “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”. That indicates that at the moment, the existing legislations are costing the economy and they may work for you, however they can possibly be exploited and occasionally the innocent fall in the gaps and get unjustly penalized. What is being proposed? The recommendation is to get the 3 year bankruptcy duration decreased to just 12 months when there is no sign of fraud or dishonest practices. These developments will mean a lot for Bankruptcy and will likely take at the very least 18 months to implement. What is Fraudulent Behaviour? Fraudulent behaviour is effectively a term that includes all of the bad points. So when it comes to Bankruptcy, this means that it will cover behaving dishonestly, hiding assets, taking reckless risks, behaving unethically or just commonly attempting to scam people. One proposed recommendation is that while they are minimizing the time for people behaving truthfully, they may in fact implement a counter proposal to target those behaving particularly dishonestly and increase the time. There are already some provisions in position for when you do not follow particular rules (and I recommend you to learn more about Bankruptcy to make sure you don’t accidentally break these rules) but it will be interesting to see exactly how this evolves. So is this a Win for Small Business? Yes, most definitely! This is going to be excellent for small business and I really hope that you are reading these changes to Bankruptcy and are getting as thrilled as I am. These proposed changes will benefit small businesses because it will motivate more individuals to get involved and take estimated risks– There will however be consequences in place, but it won’t be unfairly reprimanding those who make genuinely honest mistakes. Most small business owners I assist with Bankruptcy, are hardworking, tax paying, companies that are keeping this country going and so I am excited to observe what will be occurring next with this, and how it will affect Bankruptcy. Bankruptcy helps save lives, and it could possibly save yours. If you really require some assistance with your debts in Hervey Bay or are just considering Bankruptcy, don’t hesitate to contact us here at Bankruptcy Experts Hervey Bay on 1300 795 575, or visit our website: www.bankruptcyexpertsherveybay.com.au