Bankruptcy is a legal process for over-indebted individuals. Here’s how it works:
– You appoint a Trustee in Bankruptcy who takes control of some of your assets
– If you earn over a set amount, you make contributions from your income to your Trustee
– Your creditors deal with your Trustee, not you, and can non longer pursue you to pay the debt
– After three years, you are “discharged” and you get on with your life
HOW CAN IT HELP
With my tax debt?
At the risk of pointing out the obvious, if you can’t pay your debts, including your tax debts, then you can’t pay! Bankruptcy can draw a line in the sand and let you get on with your life!!!
To be clear, there are many negative consequences with Bankruptcy, but it also helps people bring things to a head and removes the burden of dealing with unmanageable debt.
WHAT IS A TYPICAL EXAMPLE OF
When to use bankruptcy?
For the years during and after COVID, companies traded on and the ATO didn’t pursue payment of the company tax debt. Recently, the ATO has started issuing Director Penalty Notices to directors of companies – those DPNs can make a director personally liable for the tax debts of the company. So, we are finding many examples of directors that became personally liable for their company’s tax debt.
Sometimes directors missed the DPN Notices and became aware when that liability appeared on their personal tax bill. Those people should attempt to pay the tax debt but if that is not possible, they should then look at Debt Agreements and Personal Insolvency Agreements. If none of those options is suitable, then Bankruptcy will draw matters to an end and let the person get on with their life without the burden of unmanageable debt.
IT SOUNDS COMPLICATED!!!
Yes it is! That’s why we suggest you:
Our professional memberships
Association of Independent
Board Member in-house
Our experienced team
Small Business Restructuring Practitioner (SBRP)
Registered Debt Agreement Administrator (RDAA)
Stories from our customers
I hadn’t done tax returns for 3 years and when I did I got hit with penalties and interest of $14,600. TDS applied and I had it remitted in full!
From January to May, I fell way behind on my BAS debt. TDS got me a payment arrangement to pay $50,000 over the next six months. It saved my business!