The Australian Federal Government announced back in March 2020 a number of measures intended to keep businesses afloat throughout the Covid-19 pandemic. This was in the hope that businesses will survive to kick start the economy once the pandemic is over. Some of these measures include the JobKeeper program, the deferral of loan repayments, rent relief, and relief relating to insolvent individuals and companies.
The government has recently extended the JobKeeper program to March 2021, albeit in reduced sums. The following measures, which were initially set to end in September 2020 have also now been extended to 31 December 2020:
- An increase of threshold at which a company’s creditor can issue a bankruptcy notice to $20,000 (instead of $5,000). Individuals will also now have 6 months to respond to a bankruptcy notice instead of 21 days;
- An increase of threshold at which an individual’s creditor can issue a statutory demand to $20,000 (instead of 2,000). Additionally, the debtor is allowed 6 months to respond to the statutory demand instead of 21 days; and
- Directors are also exempt from insolvent trading liabilities for debts accrued in the ordinary course of business.
Now is the Time to Deal with Your Debts
While the temporary reliefs provide a breather for many individuals and businesses, it is best for many that are currently insolvent to seek professional advice before the measures end. Seeking help now will prepare yourself or your business to deal with the with financial problems which may come.
With many of the usual worries in relation to finances being put on hold, you may seek to negotiate settlements or payment arrangements with creditors, especially now that many, including banks, are open to measures to assist debtors.
It is also an opportune time for companies to restructure their capital and have turnaround plans put in place to ensure continued viability of the business.
Contact Us For Assistance
Our team of consultants is led by specialists who are members of Chartered Accountants Australia & New Zealand (CAANZ), the Australian Restructuring Insolvency & Turnaround Association (ARITA) and the Association of Independent Insolvency Practitioners (AIIP).
With decades of combined experience, we are able to provide you with all the options necessary to avoid bankruptcy or liquidation when the relief measures are lifted. So, please get in touch with us on 1300 906 966 or send us an email at firstname.lastname@example.org to arrange a free, confidential initial discussion.