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Bankruptcy

One Year Bankruptcy is Almost Upon Us

Are you in favour of a one-year Bankruptcy?

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Bankruptcy

It’s Too Late! John Adams Hits the Panic Button on Australia’s Economy.

You may think Liquidator’s are a pessimistic lot but a former government guru says there are 7 signs Australia is on the edge of economic Armageddon and it’s too late to change course.

The signs, he says, are:

  1. Tightening monetary policy
  2. Inverted and flattening yield curves
  3. Sovereign and corporate defaults
  4. Falling confidence and credit downgrades
  5. Emerging Chinese Credit Crisis
  6. Significant Growth in Value of Crypto Currencies
  7. Discredited Australian Fiscal and Monetary Policy

Adams says he has for years been publicly and privately urging his erstwhile colleagues in the Coalition to take action but that since nothing has been done, the window has now closed and Australia is completely at the mercy of international forces.

“Unfortunately, the window for taking pre-emptive action with an orderly unwinding of structural macroeconomic imbalances has now closed.”

Have Your Say

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Source: www.news.com.au

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Bankruptcy

Business Bankruptcy in 2 Simple Steps

You’re probably reading this because you’re totally stressed by constant creditor harassment. Perhaps you’re stressed because you realise the business is now insolvent and your worried that if you allow it to continue operating, you may be jailed for trading while insolvent.

Perhaps you’re at a complete loss as to what you need to do to fulfill your duties as a director and you need some professional guidance as to what is required to bring the company to a close.

Stressed, Being Hassled, Don’t Know What To Do?

When people are stressed, they need genuine help and information that will allow them to make a fully informed decision. They also need someone that will help them make the process of business bankruptcy as easy as possible.

We are the experts in the area of business bankruptcy and Voluntary Liquidation. Because of our experience, we have streamlined the process to make it as simple and stress free as possible for you.

Whether your company is large or small, we will provide you all the documents and help you every step of the way.

2 Simple Steps to Business Bankruptcy

  • Firstly, we need to hold a directors meeting.

At this meeting, the directors formally recognize the business is insolvent. For that reason, the law requires a meeting of the shareholders/members to be called. They are the ones that will decide the future of the company.

  • Secondly, the shareholders meet and pass a resolution that places the company into liquidation.

At this point that business bankruptcy begins.

The meeting of the shareholders follows the meeting of directors and can take place on the same day provided that 95% of the shareholders agree to waive the 21 day notice period required of the Corporations Act.

Do you need Help with Business Bankruptcy?

If you are facing business bankruptcy, The Insolvency Experts will provide you all the documents needed to ensure your company is dealt with quickly, correctly and lawfully as required by s.491 of the Corporation Act investigate this site.

Because we understand the immense stress associated with a business failure, we have simplified the process to make it as easy as possible for you. We will provide you with the draft minutes of both the Directors’ and Members’ meetings. We will also provide you the necessary ASIC forms and other document templates that will make listing all your creditors details as simple and easy as possible.

We recognise business bankruptcy can be daunting and we have worked hard to make the process as simple and stress free as possible. If that sounds good, and you are also after the lowest cost company liquidation throughout Australia, call us today on our Free, 24 Hour Helpline -1300 767 525.


Disclaimer
This article is not to be construed as legal advice but is presented for information and research purposes only. No guarantee implied or expressed is given in respect of the information provided and accordingly no responsibility is taken by The Insolvency Experts or any member of the company for any loss resulting from any error or omission contained within this article.

Categories
Bankruptcy

Debt Agreement Co. referred for ‘’Dodgy” ATM advert

A Qld Debt Agreement company has been referred to the Australian Financial Security Authority (AFSA) for allegedly misleading vulnerable persons through advertisements dispensed at ATM machines.

The “dodgy” advert pushes Debt Agreements as an alternative to bankruptcy and promises “no dodgy quick fixes, costly loans, no obligations, a solution and no more stress”.

A Debt Agreement is a formal alternative to bankruptcy however there is an argument that most debtors rarely end up better off by entering into one.

Not only do debtors have to pay the often exorbitant fees of a Debt Administrator, but they are also required by the Agreement to repay most of the outstanding debt, usually over a 3 – 5 year time frame, which is longer than the vast majority of bankruptcies.

And despite all this effort, the debtors’ credit rating is ruined.

The Consumer Action Law Centre referred the case to AFSA, because of its concerns that the advertisement targets people at their most vulnerable time. It was also concerned that the advertisement was misleading those in need by making promises that are simply not true. So let’s take a look at what the fuss is about.

Debt Agreement – Are they a Real Alternative to Bankruptcy?

A Debt Agreement is a formal alternative to bankruptcy that operates under Part IX of the Bankruptcy Act.

While a Debt Agreement allows a debtor to compromise and discharge outstanding debts, they do;

  1. Negatively impact a persons’ credit rating for at least 7 years.
  2. Result in a life time listing on the National Personal Insolvency Index
  3. Make obtaining finance and rental accommodation far more difficult
  4. Impose a range of onerous obligations on the debtor.
  5. Cause stress and hardship on many debtors
  6. Operate over a period of many years and often much longer than bankruptcy
  7. Require a debtor to repay the bulk of the outstanding debt
  8. Cost substantially more than the process of bankruptcy

Entering into a Debt Agreement is an act of Bankruptcy and as such, if a debtor fails to complete the agreement, creditors can move towards bankruptcy immediately.

Under a Debt agreement, the debtor is required to pay a substantial proportion of their income towards their outstanding debts. Such payments are not required in bankruptcy unless certain income levels have been exceeded.

This means, bankruptcy is often a better alternative for people with a limited income as all their earnings can be directed towards food, rent and other day to day living expenses rather than toward the repayment of old debt.

Debt Agreement or Bankruptcy – What Are the advantages?

Considering the above, one might ask why would anyone enter into a Debt Agreement.

Perception! People believe Bankruptcy to be something that it’s not.

So let’s examine some of the things people believe about bankruptcy that are not true.

  • People believe that bankruptcy places limits on the amount of income you can earn – but this is not true. There are no limits and people are encouraged to earn as much as possible.
  • They believe that bankruptcy will result in the loss of their jobs – but again this is not true. There are very few occupations that are affected by bankruptcy.
  • They believe everyone will know they are bankrupt – but bankruptcy is not advertised. Employers won’t know about it.
  • They believe they will not be able to travel overseas – but this is possible with permission of the bankruptcy trustee
  • They believe they will lose their clothing, their possessions, tv, furniture, car etc – but again, this is not true – a person who is bankrupt can normally keep all these assets with only certain limits on cars.

In bankruptcy as in a Debt Agreement, credit rating is negatively impacted. Equity in major assets such as a house will be taken or accessed for the benefit of creditors.

So what is the benefit of a Debt Agreement? According to the promoters the benefits include;

  1. Formal bankruptcy is avoided
  2. All creditors are bound by the Formal Agreement so long as it is being complied with.
  3. One monthly payment is required to deal with all creditor claims.
  4. The debtor no longer has to deal with irate creditors
  5. Interest accumulation on debts generally stops
  6. A release from any on-going obligations to the creditors occurs automatically if the agreement is fulfilled.

As in bankruptcy, there is generally no effect on employment.

Debt Agreement Eligibility criteria

If after considering the above, a person still wishes to pursue a Debt Agreement, they must qualify for the process by having;

  • Unsecured Debts of less than $106,561.00; or
  • Assets less than $106,561.00; or
  • Income in the next 12 months less than $79,920.75 (after tax).

If a debtors’ position exceeds the above, they may be eligible Personal Insolvency Agreement. As with a Debt Agreement, a PIA is also a formal alternative to personal Bankruptcy but for people with greater levels of income, assets and debt.

A Final Note

This story highlights a sad fact – people are vulnerable when they are experiencing financial difficulties and while there are many organisations wishing to do good, such as the Consumer Action Law Centre and The Insolvency Experts, there are many more that look to profit from your weakness.

No matter how difficult the financial situation, you have options that are available to you, but it is up to you to seek the truth and proper advice and assistance. When you are in trouble, the most important thing you can do is gather information, be critical of that information and consider all the alternatives in order to determine which course of action will be best for you.

Source: News.com.au


Disclaimer
This article is not to be construed as legal advice but is presented for information and research purposes only. No guarantee implied or expressed is given in respect of the information provided and accordingly no responsibility is taken by The Insolvency Experts or any member of the company for any loss resulting from any error or omission contained within this article.

Categories
Bankruptcy

What are the Alternatives to Bankruptcy?

If you are experiencing extreme financial hardship, there is no doubt you will be considering bankruptcy.

Bankruptcy

Firstly, it should be said that bankruptcy is about allowing a person in overwhelming debt to relieve themselves of the debt burden and to allow themselves a fresh start.

If you are experiencing overwhelming debt, or a level of debt you will never be able to recover from, then bankruptcy may be the most appropriate course for you.

Informal Alternatives to Bankruptcy

To relieve yourself of the debt burden, you have choices. You may consider formal options that include bankruptcy or informal options for dealing with your debt.

Your informal alternatives to bankruptcy may include;

Avoiding Creditors

This option does nothing to deal with the debts you have as they will not legally disappear just through avoiding your creditors.

By making a choice to avoid your creditors, you are simply hoping that they will not take legal recovery actions that may include legally enforceable judgments, garnishees, writs of execution or even bankruptcy.

Just saying this, while avoiding creditors is not the most comfortable or effective way of dealing with debt, it is a valid strategy and it will work in many cases.

Private Arrangements or Settlements with Creditors

As a debtor you have the right to reach a private arrangement with individual creditors or the group of creditors.

A private arrangement may involve an agreement to pay a debt by installments or by a once only agreed lump sum that is accepted in full and final satisfaction of a debt.

Whatever the arrangement, the settlement should be evidenced by a Deed of Release for your protection.

Issues with Informal Alternatives to Bankruptcy

While you may avoid some creditors, make installment agreements or settlements with other creditors, there will always be one or two creditors that do not accept your proposal.

And because you have chosen to deal with creditors informally, it means those more stubborn creditors are not bound to your proposals and therefore, they are still able to pursue their chosen legal recovery option.

If this occurs, you will need to find a way or satisfying the stubborn creditor or you may find yourself bankrupt. This may involve paying a stubborn creditor a higher return than you paid to others. It may also involve you making a formal application to have a court imposed installment agreement in response to any judgment obtained.

What are the formal alternatives to bankruptcy?

Formal alternatives to bankruptcy exist under the Bankruptcy Act and if the appropriate majority of creditors vote in favour of these arrangements, all creditors are bound to accept the proposal.

The formal alternatives a debtor may enter into under the Bankruptcy Act includes:

If you want to discuss what are the alternatives to bankruptcy for you

Call The Insolvency Experts on 1300 767 525