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5 Signs to Consult a Bankruptcy Advisor over in Hobart, TAS

Mon, 10 Nov 2025 09:17:32 GMT

Financial distress rarely appears overnight. More often, it builds gradually—through missed payments, mounting interest, and increasing pressure from creditors. For residents of Tasmania facing personal financial hardship, recognizing the early signals that professional help is needed can prevent a manageable situation from becoming unmanageable. Delaying consultation with a qualified bankruptcy advisor may reduce available options and increase exposure to legal or financial consequences.

If you’re experiencing persistent money troubles, understanding when to seek guidance from a bankruptcy advisor in Hobart, TAS, is essential. Early intervention can clarify your rights, protect your assets, and outline a realistic path forward—whether that involves debt agreements, personal insolvency arrangements, or formal bankruptcy.

These are 5 warning signs that mean you should consult a bankruptcy advisor:

1. Persistent Inability to Meet Monthly Obligations

One of the most definitive indicators that you should speak with a bankruptcy advisor is the ongoing failure to meet basic financial commitments. This includes rent or mortgage payments, utility bills, credit card minimums, or personal loan repayments. Occasional shortfalls due to unexpected expenses are common, but chronic shortfalls suggest a structural imbalance between income and expenditure. When debts accumulate faster than they can be repaid—even with budgeting or temporary fixes—it’s time to consider professional advice. A qualified advisor can assess whether a debt agreement under Part IX of the Bankruptcy Act 1966 or another formal arrangement might offer relief without the long-term consequences of bankruptcy.

At this stage, you may also benefit from speaking with an insolvency advisor in Hobart, TAS, particularly if your debts involve business liabilities or complex creditor structures. They can help differentiate between temporary cash flow issues and deeper insolvency, ensuring you don’t make irreversible decisions prematurely.

2. Using New Debt to Pay Existing Bills

Relying on credit cards, payday loans, or overdraft facilities to cover everyday living costs is a red flag. This cycle—borrowing to service prior debt—accelerates financial decline by increasing interest burdens and reducing future borrowing capacity. It often leads to a point where no new credit is available, leaving individuals with no buffer for emergencies or essential expenses. If you find yourself regularly transferring balances, taking cash advances, or deferring payments through “buy now, pay later” schemes just to stay afloat, these are strong signals to consult a bankruptcy advisor.

Professional guidance at this juncture can help you evaluate whether informal negotiations with creditors, a formal debt agreement, or personal insolvency is the most appropriate step. Importantly, a bankruptcy advisor can also clarify misconceptions—such as the belief that bankruptcy automatically means losing your home or all assets—providing factual, tailored information based on your circumstances.

An insolvency advisor in Hobart, TAS, can further assist if your financial obligations stem from business activities, partnership debts, or guarantees, ensuring your personal and commercial liabilities are correctly assessed.

3. Receiving Formal Demands or Legal Action

Statutory demands, court summonses, or garnishee notices from the Australian Taxation Office (ATO) or other creditors are serious developments that require immediate attention. These legal instruments often precede enforcement actions such as wage garnishment, bank account freezes, or property seizure. Ignoring them can result in default judgments or even involuntary bankruptcy petitions filed by creditors.

In such cases, speaking with a bankruptcy advisor without delay is critical. They can explain your legal rights, potential defences, and whether initiating a voluntary bankruptcy might offer greater control over the process than being forced into one. Voluntary bankruptcy, while significant, provides an automatic stay on most creditor actions and allows you to work with a registered trustee to manage your estate transparently.

Additionally, if your situation involves secured debts or business-related liabilities, an insolvency advisor in Hobart, TAS, can determine whether corporate insolvency mechanisms—such as liquidation or administration—might also be relevant to your personal exposure.

4. Emotional and Psychological Distress Linked to Finances

Financial stress often manifests beyond balance sheets—it affects sleep, relationships, and mental health. If you’re avoiding opening mail, feeling constant anxiety about money, or withdrawing from social or family interactions due to shame or fear, these are valid reasons to seek support. While not a legal or financial metric, emotional exhaustion is a real indicator that your current approach isn’t sustainable.

A consultation with a bankruptcy advisor in Hobart, TAS, can provide clarity and reduce uncertainty. They offer objective analysis, free from judgment, and can outline all legally available options—including those you may not be aware of. This transparency typically alleviates the mental burden, even if formal insolvency isn’t immediately pursued. An insolvency advisor can also connect you with financial counselling services or community resources that complement legal advice, creating a holistic recovery plan.

5. Business Owners Facing Personal Liability

Sole traders and company directors often carry personal exposure for business debts—through personal guarantees, unpaid superannuation, or director penalty notices from the ATO, making the services of a bankruptcy advisor key. If your business is no longer viable , and you’re unable to meet these obligations, your personal financial position is at risk. Unlike corporate liquidation, which deals with the company as a separate entity, personal insolvency affects your credit rating, asset ownership, and future borrowing capacity.

In these circumstances, early consultation with a bankruptcy advisor is vital. They can assess whether personal bankruptcy, a debt agreement, or a personal insolvency agreement (Part X) offers the best outcome based on your asset profile, income, and family situation. Similarly, an insolvency advisor can advise on the interplay between corporate and personal insolvency, ensuring you understand how one process may impact the other.

Trust in Our Advisors

Recognizing these warning signs early—and acting on them—can preserve options, protect assets, and reduce long-term consequences. Whether you’re an individual overwhelmed by unsecured debt or a business owner facing personal liability, professional guidance is a critical first step toward stability. If any of these indicators resonate with your situation, call Hamilton Calvert Advisory on (03) 6224 4660 to speak with a qualified bankruptcy advisor in Hobart, TAS.

A Guide to Reliable Bankruptcy Services in Hobart, TAS

Wed, 14 May 2025 20:01:52 GMT

Facing overwhelming debt can be incredibly stressful, but you don’t have to navigate it alone. If you're searching for trustworthy bankruptcy services in Hobart, TAS , this guide will help you understand your options, find professional support, and take the first steps toward financial recovery.

Understanding Bankruptcy Services in Hobart, TAS

Bankruptcy is a legal process designed to help individuals and businesses struggling with unmanageable debt. In Tasmania, it’s regulated by the Australian Financial Security Authority (AFSA) and can provide relief from creditor pressure while allowing you to make a fresh start.

Common reasons people consider bankruptcy include:

Unpayable personal loans or credit card debt
Business insolvency
Sudden financial hardship (job loss, medical bills)

While bankruptcy isn’t the only solution, it can be the right choice for some. Seeking professional advice is crucial before making a decision.

Types of Bankruptcy Services Available in Hobart, TAS

Reputable bankruptcy services in Hobart, TAS offer a range of solutions, including:

Debt assessments – Evaluating your financial situation to determine if bankruptcy is necessary.
Personal bankruptcy – Helping individuals manage unsecured debts.
Business insolvency support – Assisting companies with liquidation or restructuring.
Part IX Debt Agreements – A formal alternative to full bankruptcy for smaller debts.

At Hamilton Calvert Advisory, our experts provide tailored advice to help you choose the best path forward.

How to Choose the Right Bankruptcy Service

Not all bankruptcy advisors are the same. When selecting a provider, consider:

AFSA registration – Ensure they’re licensed insolvency practitioners.
Experience and reputation – Look for trusted local experts with proven results.
Transparent fees – Avoid hidden costs by asking for upfront pricing.

Be wary of firms that pressure you into bankruptcy without exploring alternatives. A good advisor will discuss all options, including debt consolidation or informal arrangements.

Rebuilding Finances After Bankruptcy

Bankruptcy isn’t the end—it’s a chance to reset. Key steps to recovery include:

Budgeting wisely – Track expenses and avoid new debt.
Rebuilding credit – Secured credit cards and small loans can help.
Seeking financial counselling – Free services like the National Debt Helpline offer guidance.

Myths vs. Facts About Bankruptcy

Many fear bankruptcy due to misconceptions, such as:

"You’ll lose everything." → Fact: Essential assets (e.g., household goods, tools of trade) are often protected.
"You’ll never get credit again." → Fact: While challenging, rebuilding credit is possible over time.

Understanding the realities can help you make an informed choice.

Need Help? Contact Expert Bankruptcy Advisors in Hobart, TAS

If you're struggling with debt, professional bankruptcy services in Hobart, TAS can provide clarity and relief. At Hamilton Calvert Advisory, we offer compassionate, expert guidance to help you regain financial control.

Contact us today for a confidential consultation—because every financial journey deserves a fresh start.

Early Action is the Key to Avoiding Business Insolvency

Fri, 14 Mar 2025 05:57:07 GMT

SBR REGIME PROVES SUCCESSFUL IN HELPING BUSINESSES RESTRUCTURE DEBTS SO THEY CAN TRADE INTO THE FUTURE

EARLY ACTION IS THE KEY TO AVOIDING BUSINESS INSOLVENCY, WRITES KIARA CALVERT

The message is clear seek professional advice at the earliest signs of trouble as you have more options available and Small Business Restructuring (SBR) is an opportunity you can’t afford to miss out on. Don't let fear or embarrassment prevent you from taking necessary steps. It could be the difference between saving your business or closing its doors.

Australian households have been struggling with the cost-of-living crisis since the end of the pandemic. As domestic budgets tighten, discretionary spending has taken a hit—dining out, personal grooming, and pet services are often amongst the first to go.

This shift in consumer spending has placed immense pressure on businesses, particularly those in retail, hospitality, and personal services, which now face higher supply costs whilst battling reduced revenue. If profits of the business evaporate directors need to be vigilant and act swiftly to avoid disaster.

Adding to these financial strains, the Australian Taxation Office (ATO) has resumed full-scale debt collection after pausing it in March 2020 due to the COVID-19 pandemic. Since January 2023, the ATO has intensified its enforcement efforts to recover unpaid tax debt, which has ballooned to over $52 billion – nearly equivalent to the Australian Defence Budget for the 2025 financial year of $55 billion. Of this, $35 billion is owed by small businesses and self-employed Australians.

Unpaid tax debt has been on the rise since 2019, driven by shifts in tax compliance measures, economic effects of the pandemic and mounting pressures on small businesses. In response, debt collection has now become the ATO’s top priority, with a particular emphasis on unpaid superannuation, reinforcing its role in ensuring employers meet their obligations to employees. While unpaid superannuation guarantee charge (SGC) accounts for $2 billion of the total $52 billion in tax debt, it often serves as a red flag for other unpaid liabilities and can be an indicator that a business is facing financial difficulties.

To expedite recovery, the ATO has issued more Director Penalty Notices (DPNs) and Creditor’s Statutory Demands. These measures have prompted many businesses to take action, as failure to respond could lead to winding up proceedings.

The ATO’s more aggressive approach reinforces its commitment to a fair tax system, ensuring compliance, whilst supporting businesses that meet their obligations. At the same time, it sends a clear message to directors that ignoring tax debt is no longer an option.

The ATO’s renewed focus on debt collection has led to a marked increase in insolvency cases, with over 11,000 companies entering external administration during the 2024 financial year – bringing insolvency levels back to pre-pandemic figures. The current trend in insolvencies is likely to keep rising.

The construction, hospitality, and retail sectors have been hit the hardest as they struggle with higher wages, input costs, and declining consumer spending.

SBR is one of the options available for a business in financial distress that provides a pathway for small businesses to combat debt, keep the doors open and survive long term.

SBR allows eligible businesses a one-off opportunity to restructure their company debt and reach an agreement with creditors. It is simpler, affordable and faster than any other form of external administration and is becoming the “go-to” solution for many small businesses in financial difficulty.

To qualify, a business must be an incorporated company, insolvent (or at risk), and have unsecured debts under $1 million. Employee entitlements and ATO lodgements must be up to date, and directors must not have had other companies enter certain external administration in the last seven years.

The SBR process involves the appointment of a SBR Practitioner who works closely with the director to develop a restructuring plan, which creditors vote on. If approved by over 50% (by value), the plan is implemented and after distribution, the company is released from past debts covered by the plan and can successfully trade into the future.

As of 30 June 2024, 1,953 SBR’s had been initiated with a 91% approval rate, indicating that the process has been successful in helping businesses restructure their debts.

The SBR regime is very well suited to small businesses in Tasmania and will continue to be increased in scope as more people become aware of the financial benefits.

The many benefits of SBR include; directors stay in control of the business; the company can continue to trade; the process is fast with creditors required to vote within thirty five business days; and debt is permanently written off.

Given the rising adoption of SBR and its success in helping struggling businesses, it is imperative that directors consider this option before it’s too late. Delaying action or adopting a “head in the sand” approach can significantly limit the options available and expose businesses to harsher recovery actions from the ATO.

Kiara Calvert is Tasmania’s newest Registered Liquidator, Trustee in Bankruptcy and Small Business Restructuring Practitioner. She is a partner of Hamilton Calvert Advisory.

Are you a secured creditor?

Fri, 10 May 2024 05:15:31 GMT

Do you have a registered security with the Personal Properties Securities Register?

If yes, you may be entitled to recover property or receive funds in priority to other creditors. This could include:

A security over all of the company’s present and after acquired assets;
A purchase money security interest; or
You have control or a lien over property.

If you believe you are a secured creditor contact us now to ensure you maximise your position in any external administration we are administering.

Personal liability for directors when a company goes into liquidation

Mon, 06 May 2024 23:37:52 GMT

Information for those in business

When a business is struggling financially and a director is considering placing their company into liquidation, a director is often concerned whether they will be held personally liable to pay the company’s debts.

Most business owners will operate their business through a company operating as Trustee of a trading trust or a company trading in its own right. This is primarily due to tax implications and to separate business risks and company debts in order to protect a directors’ personal assets should the business fail.

If a business is operated through a company, the company owns the assets of the business and is liable for any debts incurred and the director is not generally personally liable for the company’s trading debts and other liabilities. However, if both the company and the individual cannot pay their debts, as and when they fall due, then the company may need to go into liquidation and the director may need to go bankrupt.

Personal liability for debts

If the company is placed into liquidation, and the director does not become bankrupt, the company’s liquidation will only resolve the company’s obligations to its creditors and a director may become personally liable for the following debts:

Separate personal debts – for example, personal credit cards;
Any company debts which they personally guaranteed - if the company cannot pay the debt, the director may be legally responsible to pay under the guarantee;
Any debts which they owe the company – for example, to repay a loan received from the company;
Unpaid employer superannuation contributions;
Failing to comply with a Director Penalty Notice issued by the Australian Taxation Office; and
Any debts incurred if the company continued to trade whilst insolvent.

The Liquidator will also investigate if a claim exists against the director for:

Failing to prevent the company from trading and incurring debt whilst insolvent; and
Breaches of directors’ duties.

If an individual operates the business in their own name or in partnership with another individual, rather than via a company structure, then that individual will be personally liable for all the debts of the business and may become bankrupt if they are unable to pay those debts.

If your business is in financial distress, please do not hesitate to contact us for a free, initial confidential consultation to discuss your options available.

Insightful article by Kiara Calvert on Small Business Restructuring

Fri, 19 Apr 2024 22:38:23 GMT

New pathway helping small businesses get out of debt and keep their doors open

NEW PATHWAY HELPING SMALL BUSINESSES GET OUT OF DEBT AND KEEP THEIR DOORS OPEN

TIMES ARE TOUGH FOR SMALL BUSINESSES, BUT HELP IS AT HAND TO WEATHER FINANCIAL STORMS, WRITES KIARA CALVERT

March 2020 was an unprecedented time to run a small business as economies around the world shut down due to Covid-19. Hundreds of Tasmanian businesses reached out for solutions to the hit they were about to take. It was a scary time to be in business.

The Australian government provided enormous financial incentives by way of Job Keeper and boost payments to keep businesses’ doors open and staff paid. The Tasmanian government, councils, and utilities threw everything at providing funds to stabilise and stimulate small business and provide a way forward.

As the pandemic eased, small business was in uncharted waters, everyone was guessing – Would we enter a deep recession? Would we have massive unemployment?

As events turned out, the spiralling increase in energy costs in 2022 and the amount of spending led to rapid inflation.

The old adage is true, everything that goes up, comes down. The Reserve Bank of Australia raised interest rates dramatically to combat runaway inflation, a war that is still under way with no end in sight.

Small business is now doing it tough, through a combination of factors including high interest rates and inflationary effects on energy, and materials and inputs. In addition, the Australian Taxation Office is ramping up collections, putting many businesses in deep financial trouble and struggling to survive.

To provide a pathway to save as many businesses as possible, the Australian government introduced a new insolvency regime, Small Business Restructuring – a pathway for small businesses to combat debt, keep the doors open and survive long term.

Small Business Restructuring (SBR) is an administration that allows eligible businesses a one-off opportunity to restructure their company debt and reach an agreement with creditors. It is simpler, affordable and faster than any other form of external administration and is becoming the “go-to” solution for many small businesses in financial difficulty.

In September 2023, the tax office advised that 737 SBRs had been initiated with a 92 per cent acceptance rate. That number is expected to increase exponentially and the high approval rate indicates that the process has been successful in helping businesses restructure their debts.

To be eligible for SBR, a business must be a company incorporated under the Corporations Act, insolvent, or likely to become insolvent with unsecured creditors of less than $1m.

Employee entitlements must be up to date and all lodgements with the ATO must also be up to date.

There is also a requirement that directors must not have had other companies enter certain external administration in the past seven years.

The SBR process involves the appointment of a SBR practitioner who works closely with the director to develop a restructuring plan to creditors to pay off their liabilities, in full or in part over a maximum period of three years, which is sent to creditors to vote on.

A plan is accepted if more than 50 per cent of the creditors by value that vote accept the plan and, if accepted, the SBR practitioner will distribute funds according to the plan. After distribution, the company is released from past debts covered by the plan and can successfully trade into the future.

If a distressed small business does not presently qualify, directors need to create the breathing space to qualify by working quickly to get up to date with lodgements and paying superannuation and employee debts.

The SBR regime is very well suited to small businesses in Tasmania and will continue to be increased in scope as more people become aware of the financial benefits.

The many benefits of SBR include; directors stay in control of the business; the company can continue to trade; the process is fast with creditors required to vote within 35 business days; and debt is permanently written off.

For more information on SBR, speak to your accountant, lawyer or contact a registered practitioner.

Kiara Calvert is Tasmania’s newest registered liquidator, trustee in bankruptcy and small business restructuring practitioner. She is a partner of Hamilton Calvert Advisory

Secured lender paid 100 cents in the dollar

Thu, 18 Apr 2024 10:02:15 GMT

Persistence pays off

We are proud to advise of a recent success in the office.

Lakshay Pahuja, is a key and valued member of our staff, Lakshay has been working tirelessly on a liquidation that required us to sell medical Lazer equipment, not an easy task due to the following:

The possession and location of this equipment is subject to the Tasmania Health Act and Government approval is needed to move the equipment;
Our landlord refused entry to take possession in any event;
Lakshay’s great work got our firm and the landlord on the same page;
The equipment released had to be locked down by a qualified technician;
The premises we stored the equipment in also had to be approved;
We had to find a buyer knowing that would be a mainland business;
We had to consider the legislative requirements in NSW;
We had to move the equipment to another safe location in order to safety test and show the items were fit for purpose;
We had to arrange an independent report to prove the equipment was in proper working order and not leaking radiation;
Sale to a new business had to be made by an intermediary holding funds in escrow; and
Lakshay did a marvellous job in sorting the wheat from the chaff each step of the way and finding buyers.

Congratulations Lakshay your persistence paid off, not only did you sell the gear you got the secured lender paid out 100c in the dollar a fantastic result!

Creditors paid 100 cents in the dollar

reception@bkhamilton.com (Barry Hamilton ) — Thu, 18 Apr 2024 04:39:45 GMT

To do it three times is no fluke

We are very pleased to advise that for the 3 ^rd time our firm has paid 100 cents in the dollar, on two occasions we have also paid interest.

How did we do this? – Firstly

We congratulate the directors who worked with us to maximise returns;
We congratulate the company’s legal adviser for identifying the insolvency and seeing a way forward; and
We congratulate the company’s accountants for working with us to ensure the company utilised its best taxation outcome.

The rest comes down to Team ethos. Our team leader on this file was Jennifer Henwood who maintained:

Clear and consistent communication with the directors;
Carefully navigated the tax consequences of sales to ensure carry forward losses could be utilised;
Controlled all of the nitty gritty issues to keep creditors and stakeholders on the same page;
Provided timely and regular reporting; and
Gave ASIC good communication and did not need to go down the offences and reporting path.

We worked to a budget which we kept the directors informed of, we didn’t burn and churn and remain focused on the goal, this week we paid 100 % of all claims including interest.

Thanks Jennifer for your persistence, a great team effort.

Kiara Calvert is now a Registered Trustee in Bankruptcy

Tue, 16 Apr 2024 23:03:19 GMT

Bridging The Gap in Diversity

We would like to congratulate Kiara Calvert on her recent registration as a Trustee in Bankruptcy, making her only the second female in Tasmania to be registered since the enactment of the Bankruptcy Act in 1966.

Kiara now has dual registrations as a Liquidator and a Trustee in Bankruptcy.

In an industry, which is predominately male dominated (with an estimated 20 women in Australia who hold both registrations and with women only making up just over 10% of the country’s registered liquidators and trustees), our firm was successful in obtaining a grant from the Tasmania State Government for advancing careers of females in non-traditional fields of employment. This support facilitated Kiara’s registration as both a liquidator and trustee in bankruptcy and allowed Kiara and her colleagues to attend various networking events and conferences. We extend our gratitude to the Tasmanian State Government for their initiative and hope that other State Governments will follow suit to enhance female careers and promote diversity in the industry.

If you are facing challenges, please do not hesitate to contact Kiara, she is here to listen, help, understand your circumstances and provide support to find realistic solutions.

Small Business Restructuring Success Story - debt reduced by 45%

Tue, 16 Apr 2024 10:36:28 GMT

Success Story – Retail Business

THE BUSINESS

A well established retail business located in Tasmania operating for over 16 years. The business had experienced a reduction in sales due to a competitor commencing business in the region coupled with the director sustaining a lifestyle using company funds instead of addressing tax debt.

THE SOLUTION

Hamilton Calvert Advisory worked with the director to establish change in business practices, long term viability of the business and assisted with the creation of a repayment proposal to creditors. We worked closely with the ATO (major creditor) to negotiate any potential issues with the restructuring proposal, which was ultimately accepted.

Within 3 weeks of the plan being approved, creditors received a dividend of 22c/$ and the business reduced its unsecured debt by $330,185 (45%).

As a result of a change in business practices and the small business restructure process the company is now operating successfully.

COMPANY FINANCIAL PROFILE PRIOR TO RESTRUCTURE

ATO debt $723,808
Director had received Director Penalty Notices for unpaid SGC superannuation and PAYG withholding tax - $228,166 (personally liable)
ATO had commenced proceedings to wind up the company, but had not filed with the Court at the time of our appointment

COMPANY PROFILE AFTER SBR RESTRUCTURE

Restructure Plan accepted by creditors
Director paid Director Penalty Notices - $228,166 (from sale of property) – outside of SBR plan
Director contributed $165,457 for SBR proposal
SBR dividend 22c/$
Debt reduced by $330,185 (45%)
Improved wellbeing of director
Employee job security

DEBT PERMANENTLY WRITTEN OFF = 45%

Superannuation and Bankruptcy

Mon, 15 Apr 2024 23:59:40 GMT

What happens to my superannuation if I become bankrupt?

As bankruptcy will result in available assets being realised it is important to consider the status of your superannuation balances. Superannuation is not a personal asset and is held on trust for you and governed by superannuation law and for this reason it is not available to your trustee but is also protected by section 116(2)(d) of the Bankruptcy Act 1966 .

It is important that you do not withdraw superannuation as a lump sum during bankruptcy as it would become a personal asset and available to your estate. If you entered into pension phase during bankruptcy, then the annual payment would be assessed as part of your income and you may be required to make a contribution to your estate.

Can I have a self-managed super fund during bankruptcy?

Once you become bankrupt you can no longer be trustee of your own super fund, if you are a director of a company that is trustee of your superfund you can no longer act in that role as a bankrupt cannot be a director of a company.

If you have a self-managed superfund you should speak to your financial advisor prior to becoming bankrupt so proper planning can be put in place in order for your superannuation to remain protected.

Does bankruptcy affect any life insurance?

Section 116(2)(d) of the Bankruptcy Act 1966 provides that policies of life insurance held by the bankrupt and/or their spouse or de facto partner are exempt property where the proceeds of such policies are received on or after the date of bankruptcy and become protected money.

This can also extend to property purchased with protected money so it remains unavailable to a bankruptcy trustee to realise. Protection will only be available on or after the date of bankruptcy - not before. If insurance proceeds or superannuation is received before bankruptcy and placed in a bank account or used to purchase real estate it is not afforded the protection of being exempt property and will be available to creditors.

Please do not hesitate to contact our firm for a free, initial confidential consultation to discuss your options available.

What happens if I receive an inheritance during bankruptcy?

reception@bkhamilton.com (Barry Hamilton ) — Mon, 15 Apr 2024 23:58:04 GMT

At the date of bankruptcy all of your divisible property vests in your trustee. Divisible property is all property except excluded items such as tools of trade, principal means of transport (both up to threshold limits) and household furniture. As bankruptcy normally operates for three years and one day section 116(1)(a) of the Bankruptcy Act 1966 deals with property acquired by you after the date of bankruptcy and before your discharge date.

Section 116(1)(a) of the Bankruptcy Act 1966 devolves after acquired property in your estate and is therefore payable to the trustee. If your rights to receive property from a deceased estate accrue during this period then the right is claimed by your trustee. Even if the estate was not finalised until after the date of discharge the right to receive the entitlement accrues prior to the date of discharge and therefore forms part of your estate.

A bankrupt is required to disclose all property and failure to report a deceased estate may result in:

Your bankruptcy being extended up to eight years.
Prosecution due to failure to disclose asset. Section 265 of the Bankruptcy Act 1966 provides a penalty of up to one years imprisonment for not disclosing an asset to a trustee.

Please do not hesitate to contact our firm for a free, initial confidential consultation to discuss your options available.

Common Questions around Bankruptcy

Mon, 15 Apr 2024 23:56:12 GMT

1. Who can go bankrupt?

Bankruptcy only applies to individuals and not companies. In cases where businesses operate as sole traders or partnerships, only the individual/s can become bankrupt, not the business entity itself.

2. What is bankruptcy?

It’s a legal process where a person is declared bankrupt if they are unable to pay their debts due to creditors and a bankruptcy trustee is appointed to manage the individual’s bankruptcy.

3. Can I earn income whilst I’m a bankrupt?

There is no limit to the amount of income that you can earn while you are a bankrupt, however, if your after tax income exceeds a set amount, you may have to pay contributions from your income to your trustee. This amount changes with the number of dependents you have.

4. Will I lose my job?

Being bankrupt doesn’t normally stop you from working, but there are restrictions to be aware of:

· Some trades and professions restrict you from working if you are a bankrupt; and

· Whilst you are a bankrupt you can’t be a company director or officer.

5. Can I keep my car?

Being a bankrupt doesn’t always stop you from owning a vehicle, however, there are some restrictions. In order to keep your vehicle:

1. The value of the vehicle must be below a set amount;

2. The vehicle is your primary means of transport; and

3. You maintain repayments on your vehicle if it is under finance.

6. Can I keep my house?

That depends on a few factors including:

How much is owed to the bank;
Your financial interest in the house; and
The rights of your partner or co-owner

7. How long does bankruptcy normally last?

The rule is three years and 1 day, however in some cases early discharge may be available.

My Business is Struggling what can I do?

Mon, 15 Apr 2024 23:53:18 GMT

Lets face it, owning a business in the last couple of years has been tough – the covid-19 pandemic, rising interest rates and escalating costs across various sectors, including labour, materials, rent and utilities. These factors have made it difficult for a business to maintain financial stability and profitability.

If your business is struggling, you should ask yourself one question? Are your accounts and lodgements up to date? If not, you should contact your accountant to bring these lodgements up to date and to see if they can assist you in managing your debt and achieving financial viability.

Secondly, if your business is still struggling you should seek advice from a professional advisor to discuss your specific circumstances and options available.

You should avoid a head in the sand approach. Ignoring financial difficulties will only make the situation worse.

When you’re dealing with financial stress, it can be difficult to see the bigger picture and make rational decisions. Seeking guidance from an independent and trustworthy advisor can provide clarity and perspective, helping you make informed choices about your business.

Be proactive in seeking guidance as earlier engagement often provides more options available and can help alleviate stress by providing solutions and a roadmap for dealing with your financial situation. Don’t delay in seeking help, the time to act is now!

Please do not hesitate to contact our firm for a free, initial confidential consultation to discuss your options available.

Director Penalty Notices

Mon, 15 Apr 2024 23:51:25 GMT

You may have heard the expression, Director Penalty Notice (“DPN”), if not, it is important that you seek professional advice concerning such notices. A DPN is a method by which the Australian Taxation Office (“ATO”) can make directors personally liable for unremitted group tax, PAYG and superannuation.

Directors are responsible for ensuring that the company’s PAYG, GST and super obligations (known as DPN liabilities) are reported and paid on time. Failure to do this will make current, and in some cases, former directors personally liable. This is due to the company debt liability and the director penalty liability being parallel in nature and the ATO can recover these amounts by issuing a DPN, which is a notice that the ATO must give to directors that enables it to recover the company’s unpaid amounts – PAYG, GST and super obligations.

The notice will be posted to the director/s address registered with ASIC and the ATO cannot commence proceedings to recover the director penalty until 21 days after a DPN is issued to a director.

Therefore, it is vital that a director’s postal address is current and updated as the date the ATO posts is the date the notice is given, that’s the day the time bomb starts ticking, not the date the director actually receives the notice.

If all company lodgements are up to date, the ATO will issue a Non-Lockdown DPN, whereby the director will have 21 days available to take one of the four options available to avoid personal liability under a DPN:

Pay the amount in full;
Appoint a voluntary administrator;
Put the company into liquidation; or
Appoint a small business restructuring practitioner

If lodgements are not up to date (or reported more than 3 months after the due date) the ATO will issue a Lockdown DPN to company directors. In this case, the penalty permanently locks down on the director and the only option available for directors is to pay the debt in full. Placing the company into voluntary administration, liquidation or small business restructuring will not extinguish this personal liability.

The ATO can (and will issue) Lockdown DPN to company director/s even after a company is placed into voluntary administration, liquidation or small business restructuring.

Therefore, it is vital that directors ensure their lodgements are up to date, even if they can’t pay, because it gives directors more options available if they are issued with a DPN.

If directors receive a DPN and fail to take any action, the ATO may commence action against the company to recover the director penalty amounts, and usually take steps to wind up the company.

In addition, once a DPN has been issued, the ATO can also pursue any director personally as the debt is parallel in nature.

For example, if a company has multiple directors, the ATO can issue a DPN against any one or all of the directors and then seek to recover the amount from the director of its choice. Directors with deep pockets should be wary.

The ATO can recover the penalty amounts by:

Issuing garnishee notices
Offsetting any tax credits against the director penalties
Commence legal proceedings, which could result in bankruptcy

Please consider if general advice is appropriate for your needs, contact a professional advisor, your lawyer or a member of the Australian Restructuring Insolvency and Turnaround Association (“ARITA”). ARITA members are bound by high standards imposed by that body.

Barry Hamilton and Kiara Calvert are both full members of ARITA.

Is the ATO Winding up your Company?

reception@bkhamilton.com (Barry Hamilton ) — Mon, 15 Apr 2024 23:49:14 GMT

In order for the Australian Taxation Office (“ATO”) to wind up a company it must first deliver a creditors statutory demand which will provide details of the amount that is due, what your options are and when the amount must be paid by. Do not ignore this document. Instead, contact your accountant, legal or professional advisor who is aware of your circumstances and provides independent advice so you can satisfy the requirements of the document.

If you choose to ignore a statutory demand, the ATO will usually issue a creditors petition. A creditors petition is lodged on the website of the Australian Securities and Investments Commission (“ASIC”) and advertised on insolvency notices (www.insolvencynotices.asic.gov.au). This site is public and the notice may be viewed by parties including your competitors, customers and bankers.

Be wary of any unsolicited calls from insolvency advisors seeking to be appointed as external administrator or other firms claiming they can provide special assistance. If you need to seek professional help consult your legal advisor or a member of the Australian Restructuring Insolvency and Turnaround Association (“ARITA”).ARITA members are bound by high standards imposed by that body. Barry Hamilton and Kiara Calvert are both full members of ARITA.

Remember to keep on top of your taxation obligations, always lodge on time and if you fall behind ring the ATO to arrange a payment arrangement and talk to your professional advisors as it is in their interests to help you in these circumstances.

Members Voluntary Liquidation - free fact sheet

Mon, 15 Apr 2024 23:47:30 GMT

Maintaining the registration of a private company with the Australian Securities and Investments Commission (“ASIC”) is often not cost effective, particularly when the company has ceased trading with no ongoing business activities. In such cases, opting for a voluntary winding up may prove more efficient, especially if the company has assets that can be better distributed through this process.

The initial step involves consulting your current accountant, who will ensure that all accounts are prepared, and necessary returns are submitted to the Australian Taxation Office (“ATO”). To facilitate a cost effective liquidation, it is crucial for the directors or their accountants to ensure all business transactions are complete and the company is fully prepared for liquidation.

Before initiating the winding up process, several considerations must be taken into account:

Make sure all insurance policies are correctly terminated, especially if run off cover is required;
Where possible, ensure all creditors are paid and accounts closed including telephone, essential utilities etc;
Finalise BAS lodgements (if required) – your accountant will assist you in this matter;
Make sure there are no outstanding issues, including claims before the Court (even if such claims are subject to insurance indemnity); and
If assets are to be transferred and funds are to be borrowed you need to discuss this with the liquidator so all timing issues are capable of being met.

Our office provides an extensive fact sheet that explains members’ voluntary liquidation. Please feel free to contact Samantha Nightingale via telephone at 03 62244660 or through email at reception@hcatas.com.au to obtain a complimentary copy.