Robert Gordon, prolific idea super-generator at the Fitzroy-Collingwood branch, contributes the following analysis and request to our pollies:
I ask all Federal politicians to support reform and modernisation of our Dickensian bankruptcy laws.
The thrust of the legislation approved by our elected representatives acknowledges the reality of a person in a hopeless position, asked to wipe the slate clean and start again.
These Australians are the victims of bad luck, smart sales tricks, their own trust and generosity, their own foolishness or a short or long term mental illness. A tiny minority may be shysters who must be brought to book.
Sadly 50% of us are the owners of less than average intelligence, and all of us are subject to misfortune at any time.
Around 90% of bankrupts have an average debt of $40,000, and this is mainly credit card debt. This is a joke.
Do they deserve to be hounded, embarrassed, threatened and pursued for six or more years into the future?
I understand that for every 1% rise in unemployment in the US, an extra 40,000 commit suicide. What did they do wrong? More families ruined.
I understand that there is an intense investigation of a bankrupt’s affairs in the first three months. At that point they should be freed to contribute to commercial life unless there is something untoward, with the proviso that they can be hauled back in if fraud is detected in the statement of affairs within a year.
The professionals advise that that bankrupts keep their heads down for three years. This is three years wasted, of no benefit to them or the economy. Innocent bankrupts cannot partake of normal commercial activity and are forced to disclose all their bank statements and new activities for up to seven seven years AFTER being declared bankrupt.
Currently, upon entering bankruptcy, a person may opt to take up the old age pension, volunteer for an NGO, work for a wage or gamble on options on shares or property, with the possibility that their values will increase. These decisions are the person’s personal private business.
As it stands the Official Receiver will take half of all income over $71,000 p.a. and all of any profits on options, even if they are realised after the three year period. However, if the option fails to appreciate in value, the Receiver won’t give you your option fee, or the cash you handed the bookmaker. So you cannot win and the Receiver cannot lose. It’s a racecourse tout’s dream – gambling with someone else’s money.
Or at least the Trustee won’t give a ruling one way or the other on this question.
All of the public servants carrying out their orders to hound broke and destroyed Australians over piddling amounts for years into the future could be focused on the tax avoidance by the super-rich and multinationals, or tracking down dwellings illegally bought by foreigners and putting them on the market.
Refugees get some $20,000 to set up house and get the kids off to school. Citizens whose lives have been devastated through no fault of their own could likewise be offered some support instead of being victimised.
The current Australian approach to bankruptcy is from the Dark Ages, it is based on guilt, original sin, victimisation and revenge.