Beware of dodgy insolvency advisers!

Following the wrong insolvency or bankruptcy advice could land you in serious trouble.

It's not unusual for dodgy advisers to contact individuals and company directors who are in financial distress.

They will often claim to remove the worry of your financial situation and help you avoid legal duties you may owe.

But there can be serious consequences for following the wrong advice – you could end up with a large fine or even imprisonment.

How to spot a dodgy adviser

Here are some warning signs of dodgy advisers to look out for:

  • They contact you out of the blue to offer their assistance – often after a creditor has started court action against you.
  • They offer to organise your financial affairs so you can keep your assets if you go bankrupt.
  • They suggest you transfer assets to friends and family without receiving payment.
  • They tell you to withhold or destroy financial books and records.
  • They tell you they know a 'friendly' liquidator or bankruptcy trustee that can take care of things for you.
  • They suggest they will deal with the liquidator or bankruptcy trustee on your behalf.
  • They promise to fix all your financial problems for a lump sum payment.
  • They are not members of a professional association such as ARITA, CPA, CA ANZ or a law society.
  • They offer the 'impossible' – their advice sounds too good to be true.

Ask questions

If you're concerned about the quality of the advice you're being given or that your adviser is dodgy, here are some questions to ask:

  • 'Is what you're advising me to do 100% lawful?'
  • 'Can you put your advice in writing?'
  • 'Do you have professional indemnity insurance?'

If the answer to any of these questions is 'no', you need to find a better adviser.

Advice you can trust

In times of financial uncertainty and distress, it’s important to know where to go for help you can trust.

ARITA Professional Members are qualified, professional and regulated, which means you will get accurate, timely and lawful advice to help you deal with a financial crisis.

They can provide the right advice and guidance around insolvency (including bankruptcy) and business restructuring and turnaround.

Most ARITA Professional Members  provide an initial meeting to discuss your circumstances, free of charge.

More information

Beware of dodgy insolvency advisors – Australian Financial Security Authority

Phoenix advice and your business – Australian Taxation Office

Insolvency for directors – ASIC