Jones Partner

Bankruptcy and the Family Home Part 2 – The Doctrine of Exoneration

29/05/2015 by Bruce Gleeson

In the February 2015 newsletter I wrote about bankruptcy and the family home and typically what happens when an individual enters into bankruptcy and has an ownership interest in the family home. In such situations, it is a very emotional and real practical consideration when contemplating voluntary bankruptcy. This follow on article considers the position of the co-owner (i.e. the spouse in most instances) and aspects they should consider when taking into account what offer they may put forward (if any) to the bankruptcy trustee regarding the bankrupt’s interest in the family home. I typically find as a Bankruptcy Trustee that the Doctrine of Exoneration is a concept that can be quite

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BEWARE: ATO flags tougher stance on small business tax debt

25/05/2015 by Bruce Gleeson

Recent media coverage about the ATO tougher stance on small business tax debt [Daniel Meers from Herald-Sun on 21 May 2015] should serve as a timely reminder to company directors (owners) that find themselves unable to pay GST / PAYG or SGC to get the right professional advice, rather than ignoring the problem with the hope that they will be able to deal with it later. The recent article titled “No More Mr Nice Tax Guy” was also published in the Daily Telegraph. The article in short indicated that the ATO has begun a crackdown on unpaid small business tax debt. This should come as no surprise as it tends to be these types of companies (ie mainly family businesses) that more frequently

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Bankruptcy – gambling, excessive use of credit cards and blowing proceeds from sale of property – a dangerous cocktail!!

19/05/2015 by Bruce Gleeson

A recent Media Release by AFSA see link highlights the addiction of gambling and additionally that if forced into bankruptcy as a result of such gambling, then, in certain circumstances the individual may have committed an offence under Section 271 of the Bankruptcy Act. In this case, the individual went into bankruptcy voluntarily owing her creditors almost $440,000 using 22 credit cards. In the 12 months prior to her bankruptcy she sold property owned by her and claims to have blown almost $100,000 on gambling. The individual was found guilty and pla

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Reinventing the ATO – More Insolvencies & Bankruptcies Possible!

24/03/2015 by Bruce Gleeson

Tax Commissioner Mr Chris Jordan has said in a speech to the Tax Institute on 19 March 2015 that the Australian Taxation Office (“ATO”) is bringing forward the point at which it takes legal action to recover debts from both individuals and companies. Is this a good thing or bad news? As a Registered Liquidator and Registered Bankruptcy Trustee, I see too often the impact of when family business owners (or SMEs) and individuals don’t treat the ATO with the same priority as other creditors. Left unresolved it typically means the forced liquidation of a company or bankruptcy of the individual. Consequently, I believe the recent announcement is a good thing for a couple of main reasons:

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Unemployment and Credit Card Debts – The Major Causes of Bankruptcy in 2014

17/03/2015 by Bruce Gleeson

Recent statistics issued by the Australian Financial Security Authority (“AFSA”) reveal that for the 2013/14 financial year unemployment/loss of income (8,418) and excessive use of credit card facilities (6,999) were the top 2 causes of personal insolvency. These causes have remained relatively stable since 2007/08 and are not necessarily a huge surprise. Whilst not overly unexpected, in my experience as a Bankruptcy Trustee it does illustrate what I find commonly happens and should serve as a timely reminder for individuals who may find themselves in a position where their employment has been terminated. When there is a loss of employment, it is not uncommon after the termination paym

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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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