Written 15th March 2016 – By Charles Bosse– If checking this out greatly after this date, please check out a few of our other blog posts to verify the information is still up to date. Do you realise just how much Bankruptcy in Newcastle is going to be changing? The Australian Government at the end of 2015 came up with some extreme propositions and prospective modifications to the Bankruptcy Laws in Australia, especially when it comes to the length of insolvency. At the moment, there is a minimal amount of time that you will need to remain insolvent, having said that, this 3 year duration may effectively be decreased to just 12 months. So if you are considering bankruptcy, these alterations are going to be quite important to you! How did this all happen? Well, Mark Carnegie (an expert in this field) remarked 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 trouble is he attempting to fix? Presently, the legislations don’t have adequate protections, to the level that Mr Carnegie, went on to point out in the Financial Review that offering security to family assets was needed because “banks just terrorise small business and the mental health consequences to society are enormous”. The trouble is Australia’s bankruptcy laws discouraged financiers from assisting start-ups, and therefore mentoring had been “driven out of the system” and too many people are too anxious to try and invest or try to run a 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”. This implies that presently, the current rules are costing the economy and they may work for you, but they can be exploited and occasionally the innocent fall within the gaps and get unjustly penalized. What is being proposed? The recommendation is to have the 3 year bankruptcy duration decreased to just 12 months when there is no sign of fraudulence or dishonest practices. These improvements will mean a lot for Bankruptcy and will likely take approximately 18 months to execute. What is Fraudulent Behaviour? Fraudulent behaviour is essentially a phrase that includes every one of the bad factors. So when it concerns Bankruptcy, this means that it will cover acting dishonestly, concealing assets, taking reckless risks, acting unethically or just commonly trying to con others. One proposed recommendation is that while they are reducing the time for people acting honestly, they may actually implement a counter proposal to target those acting especially dishonestly and increase the time. There are already some provisions in place for whenever you do not follow certain 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 how this develops. So is this a Win for Small Business? Yes, definitely! This is going to be great for small business and I hope that you are reading these modifications to Bankruptcy and are getting as thrilled as I am. These recommended changes will benefit businesses because it will urge additional individuals to get engaged and take estimated risks– There will still be consequences in effect, but it will not be unfairly punishing those who make truly honest miscalculations. Most business owners I help with Bankruptcy, are hardworking, tax paying, businesses that are helping keep this nation going and so I am delighted to observe what will be taking place next with this, and how it will affect Bankruptcy. Bankruptcy helps save lives, and it can save yours. If you really require some support with your financial debts in Newcastle or are just considering Bankruptcy, do not hesitate to call us here at Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsnewcastle.com.au