Bankruptcy
Spend Now Pay Later
Has anyone noticed how much of a ‘spend now, pay later’ culture our society has become? Everything in our current society pushes us to spend. Glamorous advertisements, enticing sales, special promotions, and even reward credit cards. How can we say no to that ‘to-die-for’ pair of shoes that is now 20% off or that new PS3 that’s coming with every Sony television? We don’t even need to have money in our bank accounts! We can just pay on the credit card (get some reward points while we’re at it) and we can pay it off when we have the money. Simple, right? Wrong. According to the Australian Bureau of Statistics, the average family with a credit...
Read MoreBoring Bankruptcy Update
New figures released to day by ITSA (Insolvency & Trustee Service Australia) showed that there were 6,568 new bankrupts in the March 2010 quarter, a decrease of 8.29% against bankruptcy activity in the March 2009 quarter (7,162) and a decrease of 2.98% on bankruptcy activity in the December 2009 quarter (6,770).
Read MoreSuperannuation in Bankruptcy
Superannuation is a protected asset in bankruptcy. If you file for bankruptcy, your trustee generally can’t access your super to pay out your creditors. This makes good sense for the majority of bankrupts given that super will be relied upon to fund retirement. However I’m sure you can see this poses a way for creditors to be defrauded by someone deliberately making extra super payments or lump sum payments prior to bankruptcy. Since July 2006, Trustees have been able to void transfers to superannuation. To void a transaction the trustee must show that: The transaction happened; The transaction occurred within a specific time period, or while the...
Read MoreDon’t Worry About Bankruptcy Fraud
A lot of readers are concerned about Bankruptcy offences; in fact they’re more concerned about being locked up if they file for bankruptcy. Tre are 40-plus criminal offences under the Bankruptcy Act so it’s small wonder they do. The main reason people are thrown in the the clink is because of Bankruptcy Fraud. So I thought I would briefly explain what Bankruptcy Fraud is. Bankruptcy Fraud is a crime. Basically it involves concealing assets (think Rene Rivkin), destroying important documents (think Enron), but the most common type of bankruptcy fraud involves obtaining a debt with no intention of repaying it. If you file for bankruptcy a month or so after...
Read MoreRoof Insulation Bungle Bankruptcy
7000 small businesses are facing bankruptcy and 6000 workers are likely to lose their jobs after the collapse of the insulation installation scheme. When the government introduced the home insulation scheme it dramatically increased demand for home insulation. This false demand was met by a dramatic supply side increase in the number of “insulation installers”. This false demand was bound to end at some point; it’s just happened a lot sooner than many people expected. Small business owners have likely invested large amount of money in cars, equipment, training and advertising. Many will have borrowed against their homes to set up the businesses....
Read MoreThe Top 3 Causes of Bankruptcy in Australia
The data is clear; in Australia the top 3 causes of bankruptcy are: Unemployment Domestic discord (divorce, separation) Excessive use of credit I know it’s probably no surprise that the number one trigger for bankruptcy is unemployment. Unemployment is particularly destructive because it often arrives without warning. Suddenly you’re left with no means of servicing debt that only last week wasn’t even on your mind. It also may come as no surprise that the second major cause of bankruptcy in Australia is domestic discord/divorce. Couples often get into debt together; it’s up there with getting married these days as a rite of passage. Then, when the...
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