The ATO is slowly waking from its slumber – Senate Estimates provide a glimpse into its approach in a post-pandemic Australia
As we have noted in previous communications with our networks over the last several months, one of the missing elements that has been masking financial distress in the SME space is the notable absence of debt recovery pressure from the Australian Taxation Office. In normal economic conditions, the ATO would be responsible for dozens […]
Income Contributions – Financial Hardship Applications
As discussed in a previous newsletter, should a bankrupt’s income exceed the statutory threshold, they will be required to make income contributions toward their bankrupt estate. However, should a bankrupt (who has been deemed liable for an income contribution) believe any such contribution will result in financial hardship, they may apply (in writing) to their […]
What to Expect When You Become a Bankrupt
Bankruptcy can be a very daunting option to consider and more often than not our firm encounters individuals who, rather than facing bankruptcy head on (and reaching out for help), will continue to try and ‘dig themselves out of the hole’. In doing so, these individuals will likely subject themselves to further mental and financial […]
Contributions in Bankruptcy – How much do I need to pay?
It is not uncommon for us to hear individuals facing financial difficulty to remark, ‘well if I go bankrupt, I lose all of my income’. When an individual enters into bankruptcy, they can still earn an income, however bankruptcy may have an impact on how much of their income they can retain. There are no […]
Loans for Employee Entitlements and the Effect of Subrogation
When a company is experiencing cash flow difficulties, directors will often loan money to the company to enable it to pay employee entitlements. Should the company subsequently enter into external administration, having not repaid the abovementioned loan, the directors may be able to rely on protection, by way subrogation, should there be any return to […]
Implications of Failing to Lodge a Statement of Affairs
When a person is made bankrupt by way of a Sequestration Order, Section 54(1) of the Bankruptcy Act 1966 sets out that the person must, within 14 days from the day on which he or she is notified of the bankruptcy: make out and file with the Official Receiver, a statement of his or her […]
Unreconciled accounts and third party funds when assessing the solvency of a Company
The Victorian Court of Appeal (“VSCA”), in Quin v Vlahos [2021] VSCA 205 (“the Quin Case”), recently confirmed that: A liquidator may rely on unreconciled accounts to prove that a company is insolvent; and that Director and other third party funds may be taken into account in assessing a company’s solvency if there is a […]
Personal Property Securities Register – common pitfalls which could invalidate your security interest
Registering a security interest on the Personal Property Securities Register (PPSR) can be a daunting task for anyone, let alone first time users. With terminology very rarely used outside of the PPSR process, it is easy for a financier or supplier to simply tick the wrong box or overlook a piece of information which requires […]
Being fair about pursuing unfair preferences – ASIC remind Registered Liquidators of their duties
As accountants and advisors, you have probably been approached by a client in the past who has received an unfair preference recovery letter from a Liquidator, for monies hard-earned and recovered in good faith. So it is no surprise that the process of recovering unfair preferences has come under scrutiny from industry bodies, such as […]
Director Identification Numbers – they’re here. What you need to know about the rollout
I have written about the introduction of the Director Identification Number (“DIN”) a few times over the last few years as the system has taken shape and developed. We now know the timelines associated with the rollout of the DIN regime, the details of which are provided below. Background The DIN system will serve eradicate […]