• What impact does personal bankruptcy or other Insolvency proceedings have on individual’s credit rating?

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      Written By Michael Jones
      Managing Principal
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      good-credit


      As a bankruptcy trustee I am often asked by individuals facing personal financial hardship what will happen to my credit rating if I formally declare myself bankrupt More importantly individuals are often concerned about their ability in future to borrow money for important things such as a house or a car.




      The legal position is that the bankrupt is unable to borrow money over the prescribed limit (presently $5,409)…
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    • Will the Australian government’s “single touch payroll proposal” create more insolvencies?

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      Written By Michael Jones
      Managing Principal
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      The Australian government announced measures to cut red tape for business and to provide a simplified payroll system that would mandate or a “single touch payroll system”


      The Australian Taxation Office (ATO) is currently conducting a consultation process in order to examine the consequences of this measure and has called for submissions from stakeholders.


      Under “single touch payroll”, employers will be required to electronically report payroll and super information to the ATO (Australian Tax office) when employees are paid, using standard business reporting – enable software. This is different to the current situation…

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    • Why is risk-taking and entrepreneurship important to the Australian economy?

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      Written By Michael Jones
      Managing Principal
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      Risk is essential to the business environment. Entrepreneurship relies on creativity and imagination but with every new endeavour comes risk. The usual paradigm is that there is a direct relationship between the level of risk and return or profit attributed to that activity.

      The Jones Partners’ economic research project into small to medium business (SME) Insolvencies in the Australian economy looked at the impact of risk and risk-taking on entrepreneurship. The attached video excerpt tries to answer the question -why is risk-taking and entrepreneurship important to the Australian economy? And provides an interesting narrative commentary…
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    • The effect of the environmental movement on Insolvencies in Australia

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      Written By Michael Jones
      Managing Principal
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      There are three major contributors to Australian insolvency statistics

      Obviously the overall health of the Australian Economy is important and this was clearly demonstrated in the Jones Partners Report on Insolvencies in the Australian Economy launched in July 2014. In that report it was clearly demonstrated that there is an inverse relationship between the level of GDP and the number of Insolvencies. This was more pronounced with respect to Company Liquidations, Voluntary Administrations and Receiverships than with Personal Bankruptcies.

      It’s important however to realise that the management of individual businesses is more important. In fact…
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    • Is Small Medium Enterprises -- the heartland of the Australian economy?

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      Written By Michael Jones
      Managing Principal
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      It is clear that SMEs are the back bone of the Australian economy and at a recent function launching the Jones Partners Report into insolvency administrations in Australia Craig James, chief economist of the Commonwealth Bank said that 97% of Australian businesses employ less than 20 employees. It is therefore not surprising that over 80% of companies that fail are in this category. The businesses that dominate the corporate failure statistics roughly parallel the businesses in the SME sector and are very highly represented amongst construction, retail and professional services.

    • How does the Asian economic boom affect Australian insolvencies?

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      Written By Michael Jones
      Managing Principal
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      There is no doubt that the global economy is going through enormous structural change as the weight of global economic activity increasingly shifts towards Asia. The above diagram demonstrates that in 2012 the Asia-Pacific region together with the Indian subcontinent accounts for in excess of 36% of world GDP. Australia has benefited greatly from this structural change. Three quarters of Australia’s exports are to Asia. We have a similar dependence on Asia with respect to tourism and immigration.

      Australia has just emerged from the largest resources boom in its history and…
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    • Is Management the key driver of business success or failure?

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      Written By Michael Jones
      Managing Principal
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      Although external factors do play a part in the success or failure of a business, research shows that internal factors such as the quality of management is far more important.

      The report prepared by the Australian Securities and Investments Commission (ASIC) on the reason for company failures has consistently concluded that the major reason for company failures is “poor strategic management “. The second most common reason cited for business failure is a failure to maintain proper books and records. This of course can be seen as one in the same as bad strategic management.

      In June 2013, Jones Partners…
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    • Employee Entitlement Safety Net Scheme - Costs Escalating!

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      Written By Pauline Yeow
      Managing Principal
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      Historically in Australia there is a general societal acceptance that employees should be protected in the event of insolvency. This arises largely from the premise that employee's are the lifeblood of the business. Indeed Corporations and Bankruptcy Acts provide that employees are entitled to receive their outstanding entitlements in priority to other unsecured creditors.



      In certain circumstances, these priorities see employees rank ahead of secured creditors (ie Banks) regarding realisations made from certain assets. Practically, however this priority may not result in employees actually receiving some or all of their…
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    • Rates of Currency Exchange - Impact on Australian Businesses - Jones Partners

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      Written By Michael Jones
      Managing Principal
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      According to a recent report issued by the ASIC the main reason for Corporate insolvencies can be related to ”bad strategic management” It may seem that exchange rate fluctuations are beyond the control of business managers and it is obvious that currency variations have a major contributor on Australian businesses.

      If a business relies heavily on sales to overseas customers, a high Australian dollar will cause serious problems.  On the other hand if the business purchasers goods and service from overseas a strong dollar will be a major advantage.  In some cases a minor variation…
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    • In Australia is the economy as robust as some economists would have us think?

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      Written By Michael Jones
      Managing Principal
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      Whilst interest rates in Australia are at historic lows and we remain in relatively good financial shape when compared to other Western Economies, what lies beneath needs to be understood.

      During the calendar years 2010, 2011 and 2012 we have seen corporate insolvency levels across Australia increase on average at almost 4.5% per annum. Further, many SMEs are also reported continued periods of reduced or static profits.

      Interestingly, household debt levels also remain at near historical highs, despite some media commentary to the contrary. Will this lead to an increase in personal insolvencies in  Australia? In Western Sydney, for example,…
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    • Superannuation a useful way to protect personal assets of individuals

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      Written By Michael Jones
      Managing Principal
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      Asset ProtectionIt is true that superannuation funds are ordinarily protected property in the event that an individual becomes bankrupt.  There is however and exception to this general principle where a superannuation contribution has been made to defeat the creditors.  In particular Section 128 B of the Bankruptcy Act makes specific provision in relation to transfers of property to a super fund where it can be inferred from all of the circumstances that at the…
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    • Protecting Inherited Personal Assets In the event of Bankruptcy

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      Written By Michael Jones
      Managing Principal
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      Protecting Inherited  Personal Assets In the event of Bankruptcy


      One issue that frequently arises in relation to the administration of bankrupt estates is the difficulty of the bankrupt being a beneficiary under a Will.


      Divisible property is defined broadly in the Bankruptcy Act and it includes, not only property owned by the bankrupt at the time of the bankruptcy, but also property acquired by the bankrupt after bankruptcy up until the time of the discharge, which is usually three years.  This is referred…

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    • Asset Protection for Directors and Business Owners

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      Written By Michael Jones
      Managing Principal
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      Antecedent transactions

      Business owners are often anxious about what might happen to their private assets should their business runs into difficulties and ultimately fail.

      Many individuals contemplate transferring private property into some form of entity separate from the individual (such as a company or a trust), or transferring the property to a close relative or friend in the hope that if something untoward happened to them creditors would not be able to access the property.

      Unfortunately the Australian Bankruptcy Act…
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    • Personal Insolvency - A Potted Summary

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      Written By Michael Jones
      Managing Principal
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      Personal Insolvency - A Potted Summary

      Introduction

      In Australia the Personal Insolvency regime is governed by the Bankruptcy Act 1966.  This is a Federal Act of Parliament and contrary to popular mythology the aim of bankruptcy is not to blame or punishes insolvent debtors but to afford them a process by which they can become financially rehabilitated.  A secondary aim is to ensure that creditors receive a fair distribution of the available assets and finally, that so far as the community is concerned; justice is seen to be done.

      Like all acts of parliament, the Bankruptcy Act is divided into…
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    • ATO – Insolvency and the Tax Man Jekyll & Hyde

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      Written By Michael Jones
      Managing Principal
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      The title of this paper is named after the character created by Robert Louis Stevenson commonly known today as “The strange case of Dr Jekyll and Mr Hyde”.  The Jekyll and Hyde description usually refers to a person with a split personality, one good and one bad.  So it is that in many cases the Australian Taxation Office (The ATO) seems to have a Jekyll and Hyde approach when it comes to tax payers who are unable to pay their debts due to insolvency.

      WHY IS THE ATO THE CENTRE OF ATTENTION

      When businesses get into financial difficulty, cash flow…
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    • President’s Award

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      Written By Michael Jones
      Managing Principal
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      Business Recovery Specialists Jones Partners Receives Prestigious President’s Award From Civil Contractors Federation of Australia (NSW) Branch

      On the 16th November, 2012 I received a coveted award from the Civil Contractors Federation of Australia (NSW) Branch.  The “President’s Award” was presented in recognition of Jones Partners’ commitment to educating and consulting with the Civil Contractors Federation and the industry in general.  Business recovery specialists, Jones Partners understand the trauma business owners suffer in the face of financial adversity. The award also signifies Jones Partners’ dedication to serving businesses facing difficulties…
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    • Ponzi Scheme

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      Written By Michael Jones
      Managing Principal
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      Overview

      In the 1920’s an Italian emigrant in the United States by the name of Charles Ponzi perpetrated a number of frauds against fellow Italians emigrants in the Boston area in the United States of America.

      The frauds committed by Ponzi were many and various but his most successful schemes related to the genre that now bears his name.

      The essential element in the Ponzi scheme involves the offer and often payment of extremely high returns from doubtful sources in circumstances particularly where the investors who come into the scheme at the beginning are paid their investment returns using funds raised from…
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    • Phoenix Fire Reignites

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      Written By Michael Jones
      Managing Principal
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      The Phoenix Fire Reignites


      Over recent years there has been growing concern about the increasing level of the so calledPhoenixactivity in relation to the use of the corporate entity.  The Australian Government has recently issued a discussion paper on the impact of this kind of activity and a number of recommendations have been foreshadowed.  It is important to note that the discussion paper distinguishes between what it refers to as fraudulent Phoenix activity which involves usually evasion of taxes and other liabilities such as employee entitlements through the deliberate systematic and sometimes cyclic liquidation of related corporate entities as opposed…
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    • The Insolvency Trap

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      Written By Michael Jones
      Managing Principal
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      Why Company’s fail


      It is very clear from statistics produced by the ASIC that the vast majority of companies fail as a result of poor strategic management.  Other reasons provided by the ASIC include poor cash flow management, inappropriate books and records and trading losses.  However it can be argued that all of the above descriptions really mean the same thing that is poor management.  This is good news in a way in that it means it is not inevitable that businesses fail.  Businesses fail because of the lack of the management skills of the directors and these management skills…
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    • Signs of Business Stress

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      Written By Michael Jones
      Managing Principal
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      1) General


      (i)  A Statistical Approach


      A review of the Bankruptcy (Personal Insolvency) and Corporate Insolvency statistics reveal some interesting fundamentals about the movement of Insolvency in the Australian economy.  Surprisingly Personal Insolvency seem to be decreasing from a peak in 2009, current figures seem to be stabilising at 2008 levels.  The 2009 peak appears to have been the result of a continued sustained rise since at least 2005 and there is evidence that this pattern of sharp increases has been a feature of the Personal Insolvency statistics since at least 1988.

      It is clear from an analysis of the Personal…
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    • Drive Thru Bankruptcies - STOP PRESS – URGENT UPDATE

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      Written By Bruce Gleeson
      Firm Principal
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      In my July 2016 blog, I wrote about the prospect of 1-year bankruptcies being announced as part of the (1) Productivity Commission's Report to the Federal Government on 7 December 2015. The 1-year proposal was announced as part of the National Science & Innovation Agenda and then subject of a (2) Proposal Paper in April 2016. So, what's the update?

      On 19 October 2017 the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 was read for a 2nd time in the Senate. I think it is likely the legislation will be passed and receive Royal Assent by the end of 2017 (absent of…
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    • Crowd Source Funding for Retail Investors. Good idea or the potential for them to be the new Ponzi scheme?

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      Written By Bruce Gleeson
      Firm Principal
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      The Corporations Amendment (Crowd Source Funding) Bill 2016 is due to come into operation on 29 September 2017. Crowd Source Funding (“CSF”) continues to be a popular way that allows entrepreneurs/start-ups to raise funds from many investors. Until recently CSF in Australia has been aimed at “sophisticated” or “wholesale” investors. The above Bill effectively establishes a regulatory framework to facilitate CSF by small, unlisted public companies aimed at attracting retail investors.

      There is no doubt that new funding models such as CSF which enable new ideas to get off the ground and fly and contribute to productivity growth are a…
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    • Phoenix Activity – Exposing Fraudulent Directors

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      Written By Bruce Gleeson
      Firm Principal
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      Whilst it is difficult to accurately determine the true cost of “phoenix activity” primarily due to a lack of relevant data, it has been estimated to cost the Australian economy in the vicinity of $3.2 billion per annum. (1)










      What is phoenix activity? It essentially involves one company taking over the business of another company that is liquidated where the controllers of both companies are the same people or their associates. It is important to profile and understand phoenix activity to…
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    • Bankruptcy and Family Trusts – Are They Still Effective?

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      Written By Bruce Gleeson
      Firm Principal
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      Family Trusts have and will continue to be used into the future for a variety of purposes, in particular asset protection. Most Family Trusts notably have a Corporate Trustee. As a Registered Bankruptcy Trustee, I am quite often asked by individuals who may be a Director/Shareholder of the Corporate Trustee and/or a Beneficiary of the Family Trust (or discretionary trust) what happens if the individual goes into bankruptcy (either voluntary [themselves] or involuntarily [via the Federal Court])?

      Ultimately it will significantly depend on the specific circumstances of each case and indeed the Trust Deed, but the Courts have for some…
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    • Attitude & Corporate Insolvency Profiles 2016

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      Written By Bruce Gleeson
      Firm Principal
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      One of my favourite Winston Churchill's quotes is so relevant to directors and owners in Micro, Small and Medium Enterprises ("MSME"). That is: "attitude is a little thing that makes a big difference".

      In December 2016, ASIC released its annual overview of corporate insolvencies based on statutory reports lodged by external administrators (i.e. predominantly voluntary administrators and liquidators) for the 2016 financial year (see ASIC website 16-436MR).

      Summarised in the table below are some key trends emerging from the collation of the data over the 2014, 2015 and 2016 financial years. Of particular note, is that MSME's again dominate the…
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    • Directors Vulnerable to Untrustworthy Advisors

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      Written By Bruce Gleeson
      Firm Principal
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      As both a Registered Liquidator and Registered Bankruptcy Trustee, I quite often hear about the plight of a family company director or individual who is in financial difficulty being seduced by unlicensed or unregistered supposed professionals (also referred to as pre-insolvency firms) about how best to deal with their difficult financial position, yet only to end in a worse position both financially and emotionally after taking such advice.

      Such seduction is akin to bait advertising that occurs both online and in other forms of media. It promotes a sense that everything will be sorted out and that the consequences will…
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    • Turning ideas of insolvency around

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      Written By Bruce Gleeson
      Firm Principal
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       CA Magazine - Aaron Watson

       

      It’s time people understood the value insolvency professionals add to the economy, say industry representatives.

      “You weren’t allowed to be bankrupt or insane.”

      That’s how Brendon Gibson FCA describes a proposed register of New Zealand insolvency practitioners. A partner at KordaMentha since 2003, with insolvency experienced gained over two decades, Gibson is clear that this was not an appropriate way to regulate an increasingly important sector of the professional economy.

      Gibson is the chair of the…
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    • Trading Places – Does It Really Work When a Company is Insolvent?

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      Written By Bruce Gleeson
      Firm Principal
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      trading-places–does-it-really-work-when-a-company-is-insolvent

      A talking point that I find is often raised by a director when their company is in financial difficulty and liquidation may be imminent is whether they should change directors. Let me be clear in explaining that the reason the current director is contemplating putting in their spouse or finding someone else as a director (both of whom may know very little about the business or importantly the financial position of the company) is about self preservation.Whilst it is not an unreasonable question to be posed, it…
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    • Happy 50th Birthday – Bankruptcy Act

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      Written By Bruce Gleeson
      Firm Principal
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      happy-50th-birthday–bankruptcy-actThe month of July 2016 marks the 50th birthday since the Bankruptcy Act 1966 commenced. Much has happened over that period in terms of changes to Australia’s bankruptcy laws and whilst the writer was not even thought about when the Bankruptcy Act first commenced, in my time as an Insolvency Practitioner I have seen a few key trends / changes over the last 25 years:



      • Personal Insolvency Agreements or PTX’s whilst being more frequently used options in the 90’s to deal with a debtor’s financial position have continued to be…
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    • Drive Thru Bankruptcies - Coming Soon to Australia

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      Written By Bruce Gleeson
      Firm Principal
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      I hope this headline has got your interest! Yes Drive Thru Bankruptcies or more correctly put 1 year bankruptcy terms were announced as part of the (1) Productivity Commission’s Report to the Federal Government on 7 December 2015 that looked at key drivers of business set-ups, transfers and closures. This proposal and other changes were reforms announced as part of the National Science and Innovation Agenda by the Prime Minister and then the subject of a (2) Proposal Paper in April 2016.

      It has been expressed that Australia’s bankruptcy laws are overly punitive (when compared to other overseas jurisdictions) and…
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    • To Credit Repair or Not? Time for Regulation!

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      Written By Bruce Gleeson
      Firm Principal
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      A Report commissioned and released by ASIC’s Consumer Advisory Panel (“CAP”) in January 2016 titled “Paying to get out of debt or clear your record: the promise of debt management firms” makes a number of key findings/observations.

      Specifically, the Report labels firms that promise to help consumers (or individuals) in financial hardship or with listings of payment defaults on their credit reports as “debt management firms”. Typically these firms promise to help individuals by:

      - developing & maintaining budgets;
      - negotiating with creditors or debt collectors;
      - advising and arranging formal debt agreements under Part IV of the Bankruptcy Act 1966…
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    • SMEs – Are You Aiming to Thrive or Aiming to Survive! Key Challenges

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      Written By Bruce Gleeson
      Firm Principal
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      As we approach the end of 2015 and SME owners hopefully take some time away from the day to day grind (yes please), attached below is an article that I wrote for the BiziNet Magazine November / December 2015 edition. SME owners should ask themselves as they reflect on the current year and importantly think about 2016 and beyond what their aim is! As my article explains, those that aim to thrive and have a dedicated plan (and resources) to do so are more likely to succeed than those that simply aim to survive. There are many reasons for this,…
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    • Bankruptcy and the Family Home Part 2 - The Doctrine of Exoneration

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      Written By Bruce Gleeson
      Firm Principal
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      In the February 2015 newsletter I wrote about bankruptcy and the family home and typically what happens when an individual enters into bankruptcy and has an ownership interest in the family home. In such situations, it is a very emotional and real practical consideration when contemplating voluntary bankruptcy. This follow on article considers the position of the co-owner (i.e. the spouse in most instances) and aspects they should consider when taking into account what offer they may put forward (if any) to the bankruptcy trustee regarding the bankrupt’s interest in the family home.

      I typically find as a Bankruptcy Trustee…
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    • BEWARE: ATO flags tougher stance on small business tax debt

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      Written By Bruce Gleeson
      Firm Principal
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      Recent media coverage about the ATO tougher stance on small business tax debt [Daniel Meers from Herald-Sun on 21 May 2015] should serve as a timely reminder to company directors (owners) that find themselves unable to pay GST / PAYG or SGC to get the right professional advice, rather than ignoring the problem with the hope that they will be able to deal with it later. The recent article titled “No More Mr Nice Tax Guy” was also published in the Daily Telegraph.

      The article in short indicated that the ATO has begun a crackdown on unpaid small business tax…
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    • Bankruptcy - gambling, excessive use of credit cards and blowing proceeds from sale of property - a dangerous cocktail!!

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      Written By Bruce Gleeson
      Firm Principal
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      A recent Media Release by AFSA see link https://www.afsa.gov.au/resources/media-kit/media-archive/media-release-nsw-mcelwaine-nine-month-bond-for-offence-against-the-bankruptcy-act highlights the addiction of gambling and additionally that if forced into bankruptcy as a result of such gambling, then, in certain circumstances the individual may have committed an offence under Section 271 of the Bankruptcy Act. In this case, the individual went into bankruptcy voluntarily owing her creditors almost $440,000 using 22 credit cards. In the 12 months prior to her bankruptcy she sold property owned by her and claims to have blown almost $100,000 on gambling.

      The individual was found guilty and placed on a 9 month good behaviour…
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    • Reinventing the ATO - More Insolvencies & Bankruptcies Possible!

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      Written By Bruce Gleeson
      Firm Principal
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      Tax Commissioner Mr Chris Jordan has said in a speech to the Tax Institute on 19 March 2015 that the Australian Taxation Office (“ATO”) is bringing forward the point at which it takes legal action to recover debts from both individuals and companies.

      Is this a good thing or bad news?

      As a Registered Liquidator and Registered Bankruptcy Trustee, I see too often the impact of when family business owners (or SMEs) and individuals don’t treat the ATO with the same priority as other creditors. Left unresolved it typically means the forced liquidation of a company or bankruptcy of the…
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    • Unemployment and Credit Card Debts – The Major Causes of Bankruptcy in 2014

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      Written By Bruce Gleeson
      Firm Principal
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      Recent statistics issued by the Australian Financial Security Authority (“AFSA”) reveal that for the 2013/14 financial year unemployment/loss of income (8,418) and excessive use of credit card facilities (6,999) were the top 2 causes of personal insolvency. These causes have remained relatively stable since 2007/08 and are not necessarily a huge surprise.

      Whilst not overly unexpected, in my experience as a Bankruptcy Trustee it does illustrate what I find commonly happens and should serve as a timely reminder for individuals who may find themselves in a position where their employment has been terminated.

      When there is a loss of employment,…
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    • Voluntary Bankruptcy – A big thank you from the Bankrupt! Strange – Not Really

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      Written By Bruce Gleeson
      Firm Principal
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      Recently I received an email from a former Bankrupt whose bankruptcy I had been administering. The email said “thank you both for your handling of this matter. Whilst a stressful time, your communication and consideration was very much appreciated”.

      This individual had accumulated a range of credit card debts of just over $350,000. The incurrence of such debts was largely due to some significant health and family issues that he had been trying to deal with over many years. However, it got to the point where he could no longer make any headway on the level of credit card…
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    • Bankruptcy & The Family Home – it's mine to deal with isn't it?

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      Written By Bruce Gleeson
      Firm Principal
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      Undoubtedly one of the most important questions asked by individuals who may be contemplating bankruptcy is what will happen to the family home? It is understandably a question that emotionally occupies the mind of the individual [or couple] as other key aspects centre around it, such as:


      • the impact on children and schooling [including before and after school care]; and

      • concerns regarding the ability to otherwise find somewhere with similar amenities.


      Such emotion can be heightened where the spouse / co-owner who is not subject to financial distress is unaware of the current predicament.In…
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    • Bring on 2015! But 2014 insolvency and bankruptcy statistics in context.

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      Written By Bruce Gleeson
      Firm Principal
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      In the typical busy lead up to Christmas, it can be tricky to find enough time to reflect on the year. However, from an economic/insolvency perspective, a couple of key observations can be made:

      Corporate Insolvency

      1. Companies entering into external administration ("EXAD") or insolvency decreased by almost 9% in FY14 when compared to the previous corresponding period ("PCP"). Over the past 5 years companies entering into EXAD have averaged just over 10,000 nationally.

      2. We expect company insolvencies for FY15 to decrease by approximately 6-8% when compared to FY14. This is largely due to the modest financial position of…
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    • Personal Insolvency, Bankruptcy and Debt Agreements - Are You Getting the Right Advice? The Statistics.

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      Written By Bruce Gleeson
      Firm Principal
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      As a Registered Trustee in Bankruptcy, I am always intrigued by debtors (or individuals in financial difficulty) who enter into a Debt Agreement under Part IX of the Bankruptcy Act in circumstances where they are likely to be better off financially and non-financially by entering into Voluntary Bankruptcy. In making such statement, I emphasise and realise the importance that each debtor’s circumstances should be viewed on a case by case basis. Equally I continue to be puzzled by those that operate in an unregulated and unlicensed space and continually advise debtors on all manner of options available to them, including…
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    • SME insolvencies continue to dominate corporate liquidation statistics

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      Written By Bruce Gleeson
      Firm Principal
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      A report released by ASIC in September 2014 [Report 412 – Insolvency Statistics: July 2013 to June 2014] further reinforces the research and commentary provided in the recent Jones Partners Insolvency Report that the “predominance of SME related insolvencies is longstanding and structural in nature”. A copy of report 412 can be obtained via the following link https://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Reports . When reviewing the recent ASIC report, some key trends continue to dominate and have relevance in considering the current insolvency law settings (and whether they are adequate), as well as in discussing insolvency options with SME clients.
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    • Professional Scepticism and Insolvency? More is needed for better outcomes for creditors.

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      Written By Bruce Gleeson
      Firm Principal
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      Professional scepticism is typically raised by ASIC and bodies in the context of auditors. In short, it is used in the context that auditors should "challenge" key assumptions or seek out further evidence, rather than over relying on explanations from management. Indeed it was raised recently by ASIC in its latest findings from inspections of audit firms.

      I would argue that the same concept holds for Insolvency Practitioners, be it in either corporate or personal insolvencies. Whether the cause of the financial position or the transaction(s) be deliberate, reckless or more along the lines of an error of judgement, it…
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    • Are You Money Smart?

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      Written By Bruce Gleeson
      Firm Principal
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      Understanding money and finances in order to make informed and effective financial decisions is an essential skill in today’s world. I regularly see in the field of insolvency and business recovery the adverse impacts of excessive spending and not having plans and budgets in place. Simply it can lead to financial difficulty if left unchecked. Financial literacy is something that is much talked about, yet not well embraced in many SMEs and family households – this is despite all of the technology and other platforms to assist us!

      Money Smart week runs from 1 – 7 September inclusive. More information…
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    • ATO Debt Collection Process under review

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      Written By Bruce Gleeson
      Firm Principal
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      On 26 May 2014, a review into the ATO’s approach to debt collection was announced by the Inspector General of Taxation, Mr Ali Nozoori. It was noted that over the last 10 years that the ATO has reported an increase in total collectible debt. In 2012/13 the total amount of this was about $17.7 billion and importantly over 60% was owed by small business. This supports what I frequently see, whereby the ATO is quite often the largest creditor in small company insolvencies.

      Attached is an audio link of an interview between Ross Greenwood from 2GB and the Inspector General…
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    • Employees and Unpaid Superannuation - Millions Lost

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      Written By Bruce Gleeson
      Firm Principal
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      We know from ASIC’s statistics released that of companies placed into liquidation:




      • Approximately 85% have assets less than $100,000; and

      • In about 97% of liquidations (for the year 2012/2013) a dividend of less than 11 cents in the dollar was paid.


      iStock_000010573730Medium

      The fact that many company liquidations have very few assets and the dividend rate is so low is not overly surprising. It should also be remembered that approximately 80% of liquidations involve less than 20 employees. In this…

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    • Beneath the Insolvency Statistics

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      Written By Bruce Gleeson
      Firm Principal
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      Whilst the headline statistics released by ASIC [for corporate insolvencies] and AFSA [for personal insolvencies] always make interesting reading and helps us understand correlations between the national / state economies and insolvency levels, looking beneath these statistics also reveals critical details about the most frequently used type of corporate insolvency administration, as well as the most commonly used personal insolvency option.


      Corporate Insolvencies


      corporate-insolvencies

      So why have CVL’s been the tool of choice since late 2007:




      • VA’s were first introduced in June…
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    • Insolvent Builders & Home Warranty Insurance (“HWI”)

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      Written By Bruce Gleeson
      Firm Principal
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      For many individuals or couples one of the biggest purchases in their lives will be the construction of a new home. Unfortunately over the years there have been many residential home builders that have gone into some form of insolvency administration and ceased to trade, leaving home owners with an incomplete home and lots of worries.

      We are frequently appointed as Voluntary Administrators or Liquidators to residential home builders where they are insolvent. In one recent matter, there has been an instance where the HWI policies were not adequate to cover all costs incurred in completing the homes.…
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    • Insolvency and Bankruptcy Numbers – Not What You Might Expect!

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      Written By Bruce Gleeson
      Firm Principal
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      Welcome to our first Newsletter for 2014. A subject we are frequently asked about is what are the insolvency and bankruptcy statistics doing and what inferences can be gleaned from them. During the course of the calendar year we will be providing a regular commentary on movements. Set out in this article are graphs for NSW and Australia for corporate insolvencies and personal bankruptcies / personal insolvency agreements (“PIAs”) during the period 2010 to 2013 inclusive. Some key observations are:

      Corporate Insolvencies

      • In both NSW and Australia appointments decreased by approximately 2% in the 2013 December quarter on the…
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    • Strengthening our Presence in Greater Western Sydney

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      Written By Bruce Gleeson
      Firm Principal
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      For many years now, Jones Partners has truly valued that importance of being accessible to professional advisors and business owners and individuals throughout Greater Western Sydney (“GWS”). The GWS  region is a very significant contributor to the States GDP and has a huge diversity in the range of businesses that operate within it. Our continued presence (via our Norwest Business Park Office) has enabled us to develop strong relationships with other professionals such as accountants, lawyers and financiers, as well as and importantly assist business owners and individuals in this region who may get into financial difficulty. Having a very…
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    • Small Business Survival Tips

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      Written By Bruce Gleeson
      Firm Principal
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      On 28 August 2013, I hit the airwaves on Eagle Radio – which is Australia’s first and only radio station dedicated to empowering small businesses. As an Insolvency Practitioner that specialises in advising small to medium sized businesses when they are in financial difficulty I highlighted what are the key ingredients that keep a small business afloat. Unfortunately many small businesses don’t make it through the early years of their commencement and can end up in liquidation.

      There is no doubting that small business is a vital ingredient as part of a thriving Australian business community. Running a small business…
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    • Interview with Eagle Waves Radio - The Voice for Small Business

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      Written By Bruce Gleeson
      Firm Principal
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      Looking forward to chatting with John Hagerty (co-host of the Eagle Business Show) today at 11.00am and discussing what key factors small business owners need to consider to "keep on top" and ensure they remain afloat particularly when business confidence remains low.

      Eagle Waves Radio is Australia’s first and only radio station dedicated to empowering small businesses.

      Catch up now listen to the Podcast
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    • ATO Compliance in Focus Program 2013/14 - Fraudulent Phoenixing & DPN's a focus

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      Written By Bruce Gleeson
      Firm Principal
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      The ATO’s Second Commissioner of Compliance, Mr Bruce Quigley recently released the Compliance in Focus Program for the current financial year. For those that may wish to read the entire version please go to www.ato.gov.au . As mentioned in the document, detection of non-compliance “ is achieved by analysing and matching information reported to us”. As some readers may be aware, the ATO works with other state and federal government agencies and other third parties, such as financial institutions to obtain information. That information is used to identify discrepancies including non-lodgement and under-reporting. Where the taxpayer fails to rectify…
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    • Personal bankruptcies decline for the quarter ended 30 June 2013

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      Written By Bruce Gleeson
      Firm Principal
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      The quarterly personal insolvency statistics for the June quarter 2013 show that personal insolvency activity declined by almost 1.4% when compared to the June quarter 2012. Interestingly NSW, QLD, WA and Tasmania all recorded falls in personal insolvency activity whereas Victoria, SA, ACT and Northern Territory all recorded increases.

      Bankruptcy numbers (which accounts for approximately 68% of the personal insolvency numbers for the June quarter 2013 ) actually fell by 3.93% when compared to the June quarter 2012. NSW accounted for approximately 32% of bankruptcies across Australia for the June quarter 2013.

      Personal Insolvency Agreements (also known as Part X…
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    • Expert says the Australian Economic Growth may not hit zero until around 2018

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      Written By Bruce Gleeson
      Firm Principal
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      Jones Partners hosted its inaugural “State of the Economy & Industries at Risk” this week. The presentation was given by CEO and Chairman of IBISWorld, Phil Ruthven. One of the major points Phil raised when discussing levels of corporate insolvency / liquidation was that almost two-thirds (or 67%) of corporate failures were attributed to internal risk factors. This certainly appears to correlate with our own research and that of Australian Securities and Investments Commission (ASIC) which indicates that just over 60% relates to poor strategic management. Family businesses and SME’s in particular have the challenge of ensuring that they have…
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    • Director Penalty Notices

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      Written By Bruce Gleeson
      Firm Principal
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      In June 2012 there were changes to the Director Penalty Notice (DPN) regime. Most importantly such changes now expose directors to automatic personal liability where either PAYG or SGC obligations remain unpaid and unreported for more than 3 months after the due date. Whilst the ATO will still have to send a DPN to recover on the debt - the director can no longer avoid personal liability in such circumstance by voluntary administration or voluntary liquidation. The important message is that at an absolute minimum directors should ensure that they comply with reporting obligations on-time.

      Unfortunately there is still a…
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    • Liquidation is NOT a dirty word!

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      Written By Bruce Gleeson
      Firm Principal
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      Whilst the term liquidation is frequently used, for many company directors or business owners it is still not always well understood and indeed feared. Whilst this is understandable, it is important to understand that this can also be a final part of the overall strategy when it is determined that a business (or company structure) is wound up. Critically directors and business owners need to seek professional advice (from appropriately qualified people - not unqualified consultants!!!) when they know the business is not heading in the right direction. In the main business failure is largely due to "micro" effects on…
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    • Bankruptcy

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      Written By Bruce Gleeson
      Firm Principal
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      Will you be able to keep the house? This is a question I get asked frequently by individuals that may need to contemplate voluntary bankruptcy. The short answer is YES, however it is important to understand that a bankruptcy trustee has an obligation to realise certain assets for the benefit of creditors. This includes equity you may have in the family home. It is possible for a co-owner or other family member to acquire your share of the equity in the family home from the bankruptcy trustee provided that the trustee believes it is a fair offer. It is important…
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    • When can a bankruptcy get extended?

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      Written By David Shannon
      Firm Principal
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      When an individual enters into voluntary bankruptcy, they generally remain bankrupt for a period of three (3) years. Under the provisions of the Bankruptcy Act ("the Act"), a person is bankrupt for a period of three years (3) and one day (that's a minimum period of 1,096 days - but who is counting!) from when their Statement of Affairs ("SOA") is filed and accepted by AFSA. The SOA is a questionnaire style document that sets out information about the bankrupt's financial affairs and includes details of all assets and liabilities owned by the bankrupt.

      It should be remembered when an…
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    • Supervised Account Regime

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      Written By David Shannon
      Firm Principal
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      When an individual is declared bankrupt they are subject to the Income Contribution provisions of the Bankruptcy Act for the duration of their bankruptcy. In summary, if bankrupts derive income over a certain threshold then they must contribute half of the excess over the threshold amount. The current after tax income threshold for a bankrupt with no dependants is $52,543. Often the Trustee will require the income contribution liability to be paid by way of regular contribution ie on a monthly or fortnightly basis.

      From time to time certain bankrupts fail to make income contributions when due and make no…
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    • Repeal of the Loss-Carry Back Tax Offset: Why companies may now be liable? Can the Liquidation regime be utilised?

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      Written By Daniel Soire
      Firm Principal
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      The Minerals Resource Rent Tax Repeal and other Measures Bill 2014 (“the Bill”) received Royal Assent on 5 September 2014 and became law. IMPORTANTLY, the Bill included the repeal of the loss carry-back tax offset provisions, with an effective date of 30 September 2014. The loss carry-back tax offset was originally enacted through the Tax and Superannuation Laws Amendment (2013 Measures No.1) Act 2013, which received Royal Assent on 28 June 2013 and was seen to be good chance for businesses to “smooth out” their income tax liabilities over a period of years rather than just rely on the carry forward loss provisions.…
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    • Bankruptcy & Self Managed Superannuation Funds – will you be able to continue to manage it?

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      Written By Daniel Soire
      Firm Principal
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      Many individuals, in particular business owners, are now choosing to control the destiny of their superannuation through the use a Self Managed Superannuation Fund ("SMSF"). The Australian Taxation Office ("ATO") statistics suggest that there are now more than 500,000 SMSF's in operation. It is likely that this number will continue to increase and that from time to time a SMSF may find itself in the position of having a bankrupt member and therefore possibly having to be wound up.

      The winding up of a SMSF can quite often result from…
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    • Bankruptcy & Superannuation: Look Before You Leap

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      Written By Daniel Soire
      Firm Principal
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      Individuals facing financial difficulties may think that making lump sum payments into their superannuation fund means that those funds will be “protected”’ in the event of the individual subsequently declaring bankruptcy. This misguided belief is because in the personal insolvency world, a bankrupt’s interest in a regulated superannuation fund is generally regarded as “non-divisible” property and is generally not available to creditors. However, payments to a superannuation fund will not always be protected.



      Similarly, some individuals may access superannuation early in an effort to pay creditors or use as working capital in…

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    • Tax Deductions on Expenses Incurred with Director Penalty Notices (“DPN”)

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      Written By Daniel Soire
      Firm Principal
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      The DPN Regime was introduced by the Australian Taxation Office (“ATO”) in 1993 as a method to ensure corporate compliance with taxation liabilities. Under the DPN regime, directors could become personally liable for the company’s debts under certain circumstances. The primary objectives of the DPN regime were to ensure directors caused the company to meet its taxation obligations or if this was not possible, promptly seek professional advice with the view to placing the company into voluntary administration or liquidation.

      Until recently DPNs had only applied to Pay As You Go (PAYG) withholding liabilities. However, in July 2012, the DPN…
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    • Should I transfer the family home - Beware!!

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      Written By Daniel Soire
      Firm Principal
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      We are continually surprised by individuals who transfer ownership of their property (usually the family home) to a co-owner or family member for no consideration or for consideration of less than market value who when they subsequently become bankrupt think that such transaction may not be void (or recoverable). What sometimes concerns us more is that such advice may be given to them by consultants / advisors that are inappropriately skilled to properly advise the individual of the consequences, particularly in circumstances where their financial position is perilous.

      We have recently been involved in a matter…
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    • Strengthening Our Presence in Greater Western Sydney - Narellan Office

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      Written By Daniel Soire
      Firm Principal
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      We are excited and pleased to announce the opening of our new South West Sydney Office at Narellan. Daniel Soire, a Principal of Jones Partners and a Registered Liquidator, is a local Macarthur resident and will be supervising the Narellan office.

      For many years now, Jones Partners has truly valued the importance of being accessible to professional advisors and business owners and individuals throughout Greater Western Sydney (“GWS”). The GWS region is a very significant contributor to the States GDP and has a huge diversity in the range of businesses that operate within it. Our continued presence (via our Norwest…
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    • RBA - Move interest rates down 0.25% to 1.75%

      Written By Josh Taylor
      Manager
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      On the back of low inflation data the RBA has moved interest rates down another 0.25% to an official cash rate of 1.75%.

      Read the official press release I can only get the feeling that the RBA is a bit bearish about the economies future but doesn't want to pass on the negative sentiment to the broader market at large so it has added in their what recent economic data highlights it could find for the past year.

      It is also fantastic news for those on a variable interest rate and those looking to jump into the housing market as this inevitably brings…

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    • RBA announce Interest Rates are on hold – A Bankruptcy View

      Written By Josh Taylor
      Manager
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      The RBA announced earlier today that they are going to keep interest rates steady at 2% noting the weakening Asian market, strengthening US market and strong Sydney housing market as all relevant factors in the decision. See the decision here http://www.rba.gov.au/media-releases/2015/mr-15-15.html

      Anecdotally, all Sydneyites have witnessed the ridiculousness of the housing market in Sydney and in my practice there appears to be strength in Brisbane and Melbourne as well. However, outside of these capital cities there appears to be more and more value buying opportunities opening up. If anyone considers themselves a bit of a picker don’t hesitate to…
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    • Section 66G of the Conveyancing Act in action.

      Written By Josh Taylor
      Manager
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      Trying to negotiate the sale of a home that two people had once planned their future together in can be trying at the best of times. It becomes even more complicated when one or more of the co-owners choose to make the situation much harder than it should be. When a resolution cannot be met between these parties, a Trustee being appointed pursuant to Section 66G of the Conveyancing Act 1919 (NSW) (or other equivalent legislation in the respective state) may be the only way to achieve the best possible result when it comes to a sale. Below, I have…
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    • 66G Application – The magic bullet for property sale disputes between co-owners.

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      66G Application – The magic bullet for property sale disputes between co-owners.

      In the current booming real estate market more and more people are purchasing property with co –owners in order to afford the place of their dreams. I am sure for the vast majority of people it works out and everyone lives happy ever after.

      However, various situations arise from:-


      • Relationship breakdowns (Often caused by financial issues)

      • Drug Issues (a current and most concerning social issue)

      • Gambling Issues (A major cause of bankruptcy)

      • Change in investment strategy (Property market to hot sell now before the house of cards…
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    • Why now is the time for businesses and individuals to pursue their dream, create, innovate and succeed?

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      To quote Warren Buffett “Be fearful when everyone is being greedy and be greedy when everyone is being fearful.”

      Across the board bankruptcies fell by a massive 25.14% compared to the June 2013 quarter, this drop was only partially offset by a rise in debt agreements leaving the total personal activity recorder over the June 2014 quarter at its lowest level since the June quarter in 1995.

      Such a drop in bankruptcy statistics would normally result in calls for joy from the market in general as an indication…
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    • Contractors or Employees and Director's Personal Liability

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      It appears that regulatory bodies have increased audit activity in respect of company’s who use contractors as the main part of their workforce, typically seen in industries such as construction and cleaning to name just a few.

      Should the audit find the contractors of the company are actually employees pursuant to the relevant law the company can then find itself liable for unpaid super, PAYG, workers compensation premiums and payroll tax (let alone potential employee entitlements such as annual leave and long service leave etc).
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    • Take a step back and listen

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      I was sitting with my wife and 15 month old son where the lake meets Coolum Beach this easter playing charades with my wife feverishly acting sniffing a subject to finish a movie named “bed of ____”. I must have guessed a million different types of sleeping herbs or sleep related subjects before my son started piping up with flowers. Not listening to him I continued in my mumble of ignorance guessing totally wrong, until my wife breached protocol and told me to listen to my son.

      When…
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    • My little economy and big insolvency

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      Considering the recent discussion and announcements from the United States Federal Reserve surrounding increasing US interest rates and decreasing Quantitive Easing (Money Printing) has me thinking about what this means for Australia and where we are headed.

      The Following Trend

      Traditionally the Australian economy walked down a similar path to the US economy. Their economy tanked in the late 80s, ours followed suit. Interest rate graph comparisons show a similar story. It’s easy to conclude if their interest rates are headed up…
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    • Death by Plastic - The Insolvency Trap

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      December and January are wonderful times to be Australian, our weather and location brings us both heat and swimming spots, whilst our employment generally ushers us off on leave to enjoy the scenery.

      And cricket, both us and the seagulls consume a serious amount of cricket. Unfortunately, the time honored tradition of both watching cricket with seagulls and hitting a ball near one if you get a game is under threat. The increased accumulation of plastic rubbish, most notably cigarette lighters and bottle caps combined with the over fishing / trawling of our oceans has seen millions of hungry…

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    • The Small Things

      Written By Josh Taylor
      Manager
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      Keeping on top of the small things though so often acknowledged are often overlooked. My five flavored recipe for staying afloat is a great little mind tool to adopt and thrive.

      Laugh

      Laugh at yourself. Close your eyes and imagine the sun going down and coming up regardless of your own actions. As soon as your humility gets out of check you are not in the right place to be on top of the small things that will help yourself and those around you succeed.

       

      Stakeholders

      Identify the key stakeholders relevant to your position. Depending on your plot…
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    • The Office Banana Ninja

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      As an Insolvency Practitioner I am often asked about "when" a company is trading whilst insolvent or the “signs” that a company is trading whilst insolvent. Depending on who asks the question the response will generally range from the technical cash flow tests, asset / liability ratios to the soft tests including creditors demands (Australian Tax Office director penalty notice to outstanding rent being the popular ones) and payment arrangements.

      In my opinion, this question and answer despite honest intentions (trying to chart a company to a healthy financial future) is often asked far too late. The time to ask…
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    • Save my home in Bankruptcy

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      Your home is your castle and contrary to popular belief, an insolvency practitioner can satisfy his duties as a Trustee and save your client's castle. Numerous individuals discuss with me the impact of Bankruptcy on both their ability to live in their home and to invest in their future wealth position. I am convinced the right strategy implemented by the Trustee can put you or your client in a position where they can remain in their castle and even pay off their mortgage without later forfeiting the asset to the Trustee.

      Such a strategy avoids the heart wrenching, costly and difficult task of removing an…
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    • Trusts and Insolvency

      Written By Josh Taylor
      Manager
      linkedin Google Plus
      With the recent decision in Condon v Lewis [2013] NSWCA whose basic facts involved:-

      Allowing an appeal from a beneficiary of a trust (that was purportedly created to “deceive her (the bankrupt’s) former husband, the Family Court and to avoid tax”) primarily to ensure property was part of the Kenthurst investments Trust and to enable the bankrupt as appointer to appoint a Trustee who was not the Trustee in Bankruptcy.

      It has reignited the debate in my mind around the difficulty of trusts in general and the uncertainty surrounding the steps to be taken by an insolvency practitioner who is…
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    • Low interest rates & mortgage stress - cycles are cycles

      Written By Martin Vu
      Manager
      linkedin
      low-interest-rates-and-mortgage-stress-cycles-are-cycles

      In August 2016, the Reserve Bank of Australia (RBA) cut the cash rate by a quarter of a percent to 1.5%. Last year also saw dramatic growth in median real estate prices particularly in Sydney city and metropolitan suburbs. The growth in the property market can be attributed to a number of factors including the rise in first-home buyers, an influx in local and foreign investors, demand/supply imbalances, and importantly, low interest rates maintained by the Federal Government.

      Unfortunately, with housing affordability becoming increasingly more difficult across Sydney, particularly on…
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    • Personal Guarantees and Co-Guarantors - Liability exists despite Settlement

      Written By Martin Vu
      Manager
      linkedin
      When loaning money, creditors commonly take security over a borrower's assets. If this is not sufficient, the creditor may also seek security from related parties as collateral for the principal borrower's obligations. One of the most common securities given is a personal guarantee.

      Where two or more parties guarantee a loan or debt obligations of the principal borrower, issues may arise between the guarantors when one guarantor feels as though they have contributed more than the others. In general, there is a presumption that each co-guarantor should contribute equally towards the payment of a guaranteed debt. In the event that…
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    • Members Voluntary Liquidation - does not mean insolvency!

      Written By Martin Vu
      Manager
      linkedin
      People often associate the word "liquidation" with insolvency or the failure/collapse of a company. While this may generally be the case, Members Voluntary Liquidations ("MVLs") relate to the winding up of a solvent entity and fulfil quite an important purpose.

      MVLs occur where the company has sufficient assets to pay all its liabilities within a short period (generally less than 12 months). In many MVLs, after the payment of all the company's liabilities, shareholders (or members) of the company can receive a return. MVLs should not be confused with "deregistration" which we find all too often occurs.

      MVLs may also…
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    • Void Transaction Recoveries in Bankruptcy

      Written By Martin Vu
      Manager
      linkedin
      Bankruptcy Trustees have a wide range of powers to recover property for the benefit of creditors. This power is not just limited to realising divisible property that was owned by the individual at the commencement of the Bankruptcy or which is acquired during Bankruptcy and prior to discharge. The provisions in Division 3 of the Bankruptcy Act 1966 ("the Act") allows a Trustee to effectively 'clawback' transactions which resulted in the disposal of the individual's property taking place prior to the commencement of Bankruptcy.

      If certain criteria which respect to the transactions are met, the transaction may be void against…
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    • Tax Deductions on Expenses Incurred in dealing with Director Penalty Notices ("DPN")

      Written By Martin Vu
      Manager
      linkedin
      The DPN Regime was introduced by the Australian Taxation Office ("ATO") in 1993 as a method to ensure corporate compliance with taxation liabilities. Under the DPN regime, directors could become personally liable for the company's debts under certain circumstances. The primary objectives of the DPN regime were to ensure directors caused the company to meet its taxation obligations or if this was not possible, promptly seek professional advice with the view to placing the company into voluntary administration or liquidation.

      Until recently DPNs had only applied to Pay As You Go (PAYG) withholding liabilities. However, in July 2012, the DPN…
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    • ATO Director Penalties - 5 months on

      Written By Martin Vu
      Manager
      linkedin
      Previously, the Australian Taxation Office ("ATO") were able to issue Director Penalty Notices ("DPN") to make directors personally liable for unpaid Pay As You Go ("PAYG") Withholding tax obligations that were not paid by the due date. The ATO were able to issue a DPN to the director for an amount equal to the unpaid amount. The director had the following options:

      1. Pay the outstanding amount; or

      2. Place the company into voluntary administration; or

      3. Place the company into liquidation.


      By taking any of the above options within 21 days of receiving the DPN, the director could…
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    • Outcomes in insolvency – what should I expect?

      Written By Mark Marlow
      Manager
      linkedin
      Quite obviously many people that we deal with are in a position that can be very stressful as they are unsure of their future due to either personal or business solvency issues.

      Whilst noting this scenario one of the issues in any insolvency situation be it personal or corporate is recognising the problem and seeking help to resolve it. Usually the earlier you deal with the problem the more options that are available.

      I have seen directors whose company's are only several days from being wound up by the courts rescued by the Voluntary Administration (“VA”) process. Whilst the rescue…
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    • What is Property of my Estate? Beware of after-acquired assets

      Written By Mark Marlow
      Manager
      linkedin
      One of our bankrupts recently in an attempt to justify a higher level of deposits to their bank account advised that a significant amount of the banking’s to the account were in fact cheques from the local club for poker machine winnings. The bankrupt emphasised they were windfalls, so therefore were not income for the purposes of income assessments under the Bankruptcy Act 1966 (The Act). Bankrupts whose net income is above an indexed threshold are required to contribute 50% of the income which exceeds the threshold, to their…
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    • Should The Bankrupt Pay

      Written By Mark Marlow
      Manager
      linkedin
      In the past and certainly nowadays there is a general view in the community that bankruptcy is a form of punishment. Is this the case? This article discusses the perception of bankruptcy being a punishment as well as it being a new start.

      The Australian Law Reform Commision in its report on insolvency in 1995 said the history of bankruptcy showed that it was a way forward for a person with a hopeless financial position to obtain relief from creditor pressure and make a new start. They went on to say it also protects the community from hopelessly insolvent persons…
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