LATEST ARTICLES
  • Bankruptcy
  • Press Release

Thousands of Sole Traders will have no choice but to file for Bankruptcy, according to Beyond Debt's Ben Paris. The government thresholds for Debt Agreements, an alternative to Bankruptcy, are too low at $118,063.40 and the three years term too short to assist many. There are 912,411 Sole Traders, the most common business structure in Australia, employing just under 5 million Aussies.

 

Debt Agreement Administrators are expecting a tsunami of insolvent Sole Traders in the coming months now job keeper has been turned off. Members are already receiving calls from Sole Traders they can't assist because they owe too much or can't afford enough to make a 3-year arrangement with creditors.

 

The only solution that the Morrison Government is offering Sole Traders is making Bankruptcy shorter but not less onerous. "We are expecting the Government to reintroduce one-year bankruptcy at least for an interim period," said Australia Restructuring and Turnaround Association (ARITA) CEO John Winter.

 

"Why should you have to file for Bankruptcy just because you chose to be a sole trader instead of a company? I thought the coalition is meant to be the party of small business?" Mr Paris said.

 

However, in a Debt Agreement, people are able to have $236,126.80 per person in equity

in a property, frequently saving the family home. Debtors are also able to keep other assets, which means they can keep business equipment and can buy business equipment during the Debt Agreement which, in a bankruptcy scenario, would be sold by a trustee as after-acquired property.

 

The focus of the Morrison Governments insolvency reform to date has been introducing company insolvency reform. "There's no doubt that sole traders have been ignored in this latest round of reforms" according to John Winter, ARITA CEO.

 

Mr Paris believes that the threshold for doing a Debt Agreement should be increased to $500,000, 50% of the threshold in the Small Business Insolvency Reform legislation and the term should be increased to 5 years to facilitate lower, more affordable payments for Sole Traders.

Ben Paris, Debt Agreement Administrator at Beyond Debt, he sits on the board of the Personal Insolvency Professionals Association

For media enquiries or interview request, please contact:

Ben Paris. 0404 064 700 ben.paris@dcsgroup.com.au

Beyond Debt is Australia's second largest Debt Administrator. Founded in 2004 they have assisted Australian's clear over $250 million in debt. They are a member of Family Business Australia and headquartered in Brisbane. They received a Platinum Trusted Service Award in 2021.

Ready to become debt free?

Take the first step to a debt free future

Ready to become debt free?

Take the first step to a debt free future

You might find these interesting

Ready to become debt free?

Speak with one of our specialists to start your future

About Beyond Debt
Get Help