Bankruptcy protects the director from debts owing by his or her insolvent company

Bankruptcy Protects The Company Director

When a company director becomes bankrupt, the liabilities owing by the insolvent company for which the director is liable are caught by the director’s bankruptcy. This includes monies owing to the ATO, personal guarantees and any claim a liquidator may subsequently make for insolvent trading of the company or monies owing by the director to the company.

It is worth also mentioning that we often get asked whether bankruptcy clears a person’s tax debts, both business and personal. The answer is yes.

We trust this blog has assisted you. This blog is provided as general information only and is not advice. If you have questions pertaining to one of your clients, please give us a call on 1300 060 122 or email helpdesk@nichollsco.com.au

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