Bill aims to help bankrupts

Pilbara News - - Front Page - Ali­cia Per­era

Debt-af­fected Pil­bara prop­erty and business own­ers suf­fer­ing in the wake of the end of the min­ing boom could be some of the big­gest win­ners if new leg­is­la­tion is passed re­lat­ing to bank­ruptcy.

A Bill amend­ing the Bank­ruptcy Act, in­tro­duced into Fed­eral Par­lia­ment last month, would re­duce the term peo­ple would be sub­ject to bank­ruptcy from the cur­rent three years to only 12 months, and is ex­pected to make debts eas­ier to dis­solve and banks more will­ing to ne­go­ti­ate al­ter­na­tives to bank­ruptcy.

Kar­ratha-based fi­nan­cial ad­viser, Fi­nan­cial Ser­vices man­ag­ing di­rec­tor Mark Hayes, said the leg­isla­tive change would be es­pe­cially wel­come in the Pil­bara where the num­ber of peo­ple in fi­nan­cial hard­ship to the point of con­sid­er­ing bank­ruptcy was above the national av­er­age and “more . . . than what you might think”.

“It will give peo­ple an op­por­tu­nity to re­cover much more quickly,” he said of the leg­is­la­tion.

“We have a high level of bank­rupt­cies in the Pil­bara and . . . the two main rea­sons are prop­erty prices fall­ing and small busi­nesses strug­gling.”

How­ever, Mr Hayes noted cred­i­tors could suf­fer un­der the changes and busi­nesses would have to keep sup­pli­ers on a “short lease” to mit­i­gate the risk of not be­ing paid.

WA In­sol­vency So­lu­tions part­ner Chris Wil­liamson said the amend­ment was part of a trend to­wards bank­ruptcy be­com­ing more ac­cepted, es­pe­cially in the Pil­bara where the min­ing down­turn had taken its toll.

“The num­bers are in­creas­ing and the stigma that used to be there many years ago re­ally isn’t there be­cause there’s so many things that have hap­pened,” he said.

“You look at the mar­kets here in Kar­ratha with the prop­erty — who fore­saw that the prop­erty was go­ing to fall by the val­ues that it did?”

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