The changes are now available for public consultation and are intended to modernise the current legislation to better reflect what is actually happening in the community. Specifically, it is addressing the fact that we are increasingly seeing a larger number of bankruptcies in relation to consumers with a small amount of assets and low income levels. Where previously bankruptcy was more commonly associated with individuals who were often simply attempting to avoid paying their debts, bankruptcy is now being increasingly accessed by those who have simply found themselves having a hard time financially.

Some major items of the proposed changes include:
• increasing the minimum debt for which a creditor can petition for bankruptcy from $2,000 to $10,000;
• increasing the stay period from when a declaration of intent to file a debtor’s petition is filed to when a creditor may commence action to recover debts from seven to 28 days; and
• increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements.

In essence, the Bankruptcy Legislation Amendments Bill 2009 aims to promote proactive discussion, negotiation and remedies. This should see that honest debtors are given a legitimate opportunity to sit down with their creditors and make arrangements for the repayment of debts and creditors are satisfied that they will receive the monies that are due to them without the need to send excessive numbers of individuals bankrupt.

In light of that, the Bill also seeks to toughen the penalties in relation to fraud and other bankruptcy offences so that insincere parties cannot take advantage of the new conditions that are favourable for those who are actually in trouble.

Due to the recent events in both the global and local economic climates it follows that there are more consumers and individuals who are experiencing financial difficulty than in previous times. The introduction of changes to personal bankruptcy laws will hopefully assist those in trouble to find alternative means to get back on their feet and get their financial affairs in order. It is not ideal for the individuals, the creditors or the country as a whole to see increasing numbers of the population have to formally file for bankruptcy so the Government is using the legislation reforms to aid in the reduction of potential bankruptcy figures which were up by 11% for the last financial year when compared with the previous financial year.

In a recent interview Mr McClelland pointed out that on average a debt agreement would see the creditor receive around 76 cents for every dollar that they were owed. In comparison, where the path of bankruptcy is taken the creditor is usually lucky to receive 1.6 cents in the dollar. In the case of bankruptcy, not only does the creditor lose out but the individual will have a record of debt against this creditor and this will almost certainly affect future borrowing capabilities.

The team of lawyers and accountants at The Quinn Group are available to offer advice on a range of credit and debt situations from negotiating with creditors and debtors to administering the bankruptcy if that is required. For more information and advice contact us on 1300 QUINNS or visit our website http://www.quinns.com.au and submit an enquiry.

The Quinn Group is an integrated, accounting, legal, and financial planning practice offering expert advice to help you achieve your business and personal goals. With more than 15 years’ professional experience, we are committed to building long-lasting relationships with our clients by providing superior service in a timely and cost-effective manner. For more free advice please visit Lawyers.

When to file for bankruptcy? The short answer is you should try every other solution first.

For small business owners, a business bankruptcy can affect your personal finances. If your company is a partnership or sole proprietorship, you can be held personally responsible for your business debts. That means your personal assets can be used to satisfy your creditors! Of course, in these cases, you should seek every potential alternative in order to protect your personal property and assets. Moreover, a bankruptcy filing will probably make it harder to start a new business down the road. Not only will your assets be depleted, but you’ll also have the social stigma and financial baggage of a past bankruptcy.

However, even when your company is besieged by creditors, there may be non-judicial options available. Restructuring and financial workouts can help satisfy your debtors without filing for bankruptcy. In many cases, just informing your creditors that you’re considering bankruptcy is usually enough incentive to bring them to the bargaining table. These prevention methods facilitate the creation of a compromise between your business and debtors. Whereas a bankruptcy would likely result in the creditor getting nothing, these negotiations result partial repayment, Workouts and debt restructuring are an effective way of satisfying your company’s debts without the hassle, cost, or embarrassment of a filing bankruptcy.

On the other hand, if your creditors are refusing to compromise and your debts can’t be resolved any other way, bankruptcy protection may be your only option. Depending on your business structure and financial situation, there are a number of options available for corporate bankruptcy. To determine the most appropriate action for your company, you’ll want to consult with an experienced attorney. In fact, if you’re facing mounting debts, you may want to consult a bankruptcy lawyer before the situation becomes dire. He or she may be able to help get your company turned around with knowledgeable guidance and bankruptcy prevention advice.

Matt Gallo is the Internet marketing manager for Prospect Genius, a leader in affordable online marketing solutions.

Auto refinance allows you to repay your existing car loan and replace it with a refinanced one. This might sound a pointless act of swapping one loan for another, but if you make the right choice it can be beneficial.

By taking out a refinanced loan you are changing the terms of your original loan. This can mean lower monthly repayments, extended repayment time and you may even benefit from lower interest rate than your current rate.

Refinancing can allow you to lower your monthly costs, give you some breathing room during tighter financial times and even save you money in the long run.

The exact terms of your refinance will vary heavily depending on the car manufacturer and model, the refinance provider and the terms of your current finance arrangements. There are a variety of companies vying to offer auto refinancing so do your research before committing yourself.

There are, of course, risks to refinancing your car. The lower interest rates may seem inviting but the overall interest cost over the term of the loan may actually cost you more. There can also be potential costs of performing the refinance itself, depending on your original finance terms, which can outweigh any possible gain.

It’s a simple enough process to decide if auto refinance can benefit you. Research and understand your current finance agreement and the potentials of refinancing. Remember to calculate the cost over the life of the loan term and keep the refinance charges in mind.

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