Jones Partner

Voluntary Bankruptcy – A big thank you from the Bankrupt! Strange – Not Really

12/03/2015 by Bruce Gleeson

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 debt, despite earning a six figure salary. The inability to reduce the debt was taking a toll on his health and ove

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Bankruptcy & The Family Home – it’s mine to deal with isn’t it?

24/02/2015 by Bruce Gleeson

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 my view, it is vital that empathy is shown in dealing with this aspect, whilst still properly dea

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Bring on 2015! But 2014 insolvency and bankruptcy statistics in context.

19/12/2014 by Bruce Gleeson

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 the non-resource states (i.e. NSW/VIC) and the proportion of

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Personal Insolvency, Bankruptcy and Debt Agreements – Are You Getting the Right Advice? The Statistics.

15/10/2014 by Bruce Gleeson

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 Personal Insolvency options for which they are simply unqualified to ta

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SME insolvencies continue to dominate corporate liquidation statistics

09/10/2014 by Bruce Gleeson

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 . 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.  For 2013/14, based on l

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Professional Scepticism and Insolvency? More is needed for better outcomes for creditors.

07/10/2014 by Bruce Gleeson

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 is important for the Insolvency Practitioner to sufficiently test the cl

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Are You Money Smart?

29/08/2014 by Bruce Gleeson

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 about it can be obtained from the links below. Check out the “credit quiz” and “b

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ATO Debt Collection Process under review

05/06/2014 by Bruce Gleeson

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 Ali Nozoori.   . . .

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Employees and Unpaid Superannuation – Millions Lost

29/05/2014 by Bruce Gleeson

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. 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 sense the dominate source of corporate insolvency relates to small incorporated businesses. It is significant to note that small businesses employ almost half of the total industry workers. Therefore, when these sma

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Beneath the Insolvency Statistics

by Bruce Gleeson

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 So why have CVL’s been the tool of choice since late 2007: VA’s were first introduced in June 1993. At this time the Australian Taxation Office (“ATO”) introduced the Director Penalty Notice (“DPN”) regime. At th

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