A debtor, a building contractor approached us regarding his income tax liability. He was retrospectively assessed for eight years of unpaid Income Tax. He was unsuccessful in seeking to come to an informal arrangement with the Australian Taxation Office prior to seeking formal advice.
The debtor was a joint registered proprietor of residential property with his wife and wanted to avoid bankruptcy, the loss of his builders licence and keep his property.
We suggested that the debtor seek refinance of his mortgage and enter into a Part X Arrangement with his creditors. We advised that at the time the property market in Sydney had moved considerably and accordingly the value of his property would have increased substantially.
The debtor had stable employment and could still work for at least ten to fifteen years.
After successfully obtaining refinance the debtor executed a Section 188 Authority and creditors accepted his lump sum offer of approximately 35 cents in the dollar.
The debtor avoided bankruptcy, avoided the loss of his builder's licence and retained his property.