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By Pamela Wardle, Legal Practitioner Director
There appears to be a misconception in general that if a person cannot pay their debts that they will simply declare bankruptcy so they will not have to worry about the bills anymore. Unfortunately, this is far from reality. The first thing to consider is where a bankruptcy is recorded. A permanent notation of bankruptcy will be entered on the National Personal Insolvency Index and there is also a notation with credit reporting agencies for a period of time. These records can have significant effects on any future credit contracts such as applying for a home loan or even rental contracts for electronic goods. Next, consider the effect on non-cash assets and future income. During the bankruptcy period (usually three years but may be five or eight years) a trustee will be appointed to manage assets and debts and the trustee may, among other things: 1. sell assets to pay debts; 2. recover income earned over a specified limit; 3. recover property transferred to someone else; or 4. deal with property acquired during a bankruptcy (eg from the death of a loved one). Also, a bankrupt person cannot keep tools or equity in a motor vehicle with a value over a specified limit. Finally, consider the effect of bankruptcy on careers and personal obligations. A bankrupt person may not be able to practice in some professions at all or may be restricted from holding a trust account in other professions. A bankrupt person cannot be a director of a company, a trustee of a trust, an attorney or an executor under a Will. If you are having difficulties paying your debts, we can refer you to the relevant people who may guide you through your options and obligations.
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By Pamela Wardle, Legal Practitioner Director
Negotiating a lease often represents a new business or venture and can be a very exciting time. At this stage, the parties often focus on issues which will apply immediately such as the rent payable, how it is payable and whether or not the rent includes GST, which charges are covered in outgoings and what proportion is payable by the Lessee and what is the term of the lease. When negotiating the lease it is equally important to consider the terms which relate to the end of the lease, for example: 1. In what condition are the premises to be left when the Lessee leaves? For example, is the Lessee to remove all fixtures and make good any repair, essentially leaving an empty shell? If not, what is to remain and in what condition? What types of costs must the Lessee pay if he or she does not comply with the terms of the Lease and how can the Lessor recover these costs? 2. What are the Lessor’s rights if the Lessee owes money at the end of the Lease? Can the Lessor recover those costs as a liquidated debt or are there specific steps the Lessor must follow before recouping those costs? 3. Who pays any legal costs associated with ending the lease? For example, if the lease is registered does the Lessee pay the costs of surrendering the Lease from the title? It is important to consider these issues and others which may arise at the end of a lease to assist all parties to end the lease on good terms. |
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