Bankruptcy Canberra, So what is the Deal with Debts?

Exactly what Debts are erased if I go Bankrupt?

The practical answer is that when it involves Bankruptcy most debts are wiped, and I have also included a compendium below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) as well as any debts arising from uninsured Motor-vehicle claims and educational debts which include HECS or FEE-HELP. These debts are not wiped out when you file for bankruptcy.

What about Secured Debts?

A secured debt is a car loan or a home loan; it is a debt that has some definite security linked to it. So as an example if you buy a new car for $40,000 dollars the security for that car is the actual car itself.

So, can my secured debts be eliminated if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt erased if you simply hand back the car. So the lesson is that you cannot have your cake and eat it too (so to speak), so yes all of your secured debts may be wiped but the asset will need to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is necessary to get professional advice - like that offered at Bankruptcy Experts Canberra.

What about my Tax Debts with the ATO can they be removed If I go bankrupt?

Yes they can, both business and personal debts owing to the ATO can be removed with bankruptcy. If you have a business with any kind of debts find some advice because it is not always so basic. Feel free to call us here over at Bankruptcy Experts Canberra if you have any type of questions on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsCanberra.com.au

What about my business or Company debts?

Sometimes when it involves Bankruptcy we can really help you with your business debts, call us about this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Generally you may have to liquidate a company to deal with the debt that way. When it comes to Bankruptcy, it can be a confusing area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Experts Canberra we specialise in business and personal debts so give us a call here at Bankruptcy Experts Canberra if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsCanberra.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be complicated and difficult to understand. A question we usually get asked here over at Bankruptcy Experts Canberra is 'what happens to my super if I file for Bankruptcy'? The answer for most is easy, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then very little happens; your super is 100 % safe when it comes to Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, take into consideration the evolving number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it concerns Bankruptcy?

Remember Bankruptcy Experts Canberra is not indicating this article is the whole story, if you have any questions feel free to call us on 1300 795 575. Regardless if you call us or another person it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we suggest you obtain both legal and financial advice before proceeding with any of the actions proposed in this article.

What is a Disqualified Person?

First and foremost, if you are thinking about Bankruptcy, you can not be a part of a SMSF. Why? Because if you are dealing with bankruptcy, you will be identified as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means the two of these members need to also be the individual trustees. The duty of trustee presents a lot of legal rules, and if you are in this position I would highly recommend you to be knowledgeable about them all-- for example the fact that you can not 'know or suspect' that one of you are bankrupt. So you can see how an individual bankruptcy can be very destructive to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have so as to restructure my SMSF Fund once I'm bankrupt?

So what happens if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will need to be reorganized. This means that you will have to consider your over-all structure and ensure that it is meeting the basic conditions, involving having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the most ideal plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale reorganizing issues, there is a lot of paperwork to deal with too, and you need to be continuously keeping the ATO informed of what is happening. This suggests you need to let them know that you have a bankruptcy problem with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they must also notify ASIC of their resignation.

Over that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are not exactly sure call Bankruptcy Experts Canberra for some free advice on 1300 795 575.

What if I have a single member fund?

If you are a single member fund, then you will have to appoint a new director, and it will then end up being their duty to oversee the sale and transfer of assets into a managed fund. If there are two or more members, than the bankrupt member will need to resign and the other member will clear away the property and halve the proceeds. They would then want to decide if they wish to remain as a single member SMSF, or if they intend to roll everything into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets as soon as possible and transfer the liquid assets to the managed fund.

From that you can notice how when it comes to Bankruptcy, even when one single member is dealing with issues, it can affect the very existence of an SMSF. If you are currently facing this problem yourself, or with a partner in a SMSF, please seek financial advice to make certain you are satisfying the ATO requirements.

A simple solution ...

As I suggested earlier, a simple solution to your SMSF issue is to put your super back into a normal regulated managed fund prior to bankruptcy and save yourself all the problems outlined above. Bankruptcy is never easy, but receiving proper advice is the best initial step. If you want to discuss your possibilities further, call us at Bankruptcy Experts Canberra or visit our website: www.bankruptcyexpertsCanberra.com.au or just call us on 1300 795 575.

Bankruptcy in Canberra - Will I lose my house if I go bankrupt?

Bankruptcy Canberra is a confusing process, but I know from meeting with thousands facing the chance of bankruptcy over the years, that not much worries people more than the notion of losing the family home. Almost every person is emotionally connected to their home - it's where the children have grown up, it's where you take pleasure in life on a day to day basis.

Will you lose your home if you go bankrupt? The answer is a resounding maybe. (not very useful, I know) People generally imagine it's an inevitable consequence and a part of Bankruptcy, and as a result push themselves to the brink of insanity to not lose the family home. But when it comes to the whole process of Bankruptcy, a key strength of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've accepted to pay back the debt you are in.

So how is it possible to keep my Canberra house, you ask? It's easier if I explain the basic concept behind the Bankruptcy process as administered by the trustee, then you'll have a more clear image.

The job of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very dull read about 600 pages if you are serious).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is done in a bunch of different ways but it mainly comes down to income and assets. The trustees role is to collect payments over and above your income threshold. The further role is to sell off any assets that can contribute to paying back your debts.

What this sounds like is that yes the trustee will sell your house right? Not always. The only reason the trustee will sell any asset including your house is to get money to repay your debts. If there is no equity on your property then it's pointless to sell your home. This is happening more and more since the GFC as house prices in many areas have been heading south so what you paid 4 years ago may not always reflect the price today.

A quick word of advice here if you have a house in Canberra and are looking at Bankruptcy: get a skilled professional to help you through this process, there are lots of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they want to sell your house and not take the risk? The bank that has generously lent you the money for your house is making good money every month in interest out of you, month in month out, just as long as you keep up to date with your repayments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee decides that there is plenty of equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to make a note of the value of your house and the level you owe on the house. A tip if you are trying to work out the value of your house: use a registered valuer as this will provide you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to arrive at this figure. When you get a valuer out to your home, make certain you tell the valuer to value the property for a quick sale, ensure you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to offer two valuations: one for a quick sale and one for a well marketed non time sensitive sale. These days that's not the case, but if you meet them and tell them you need to sell your home in the next 30 days you may control the result. The idea is that you want a real sell now figure.

There are two reasons this valuation system is critical to you: one you are going to have peace of mind ascertaining the market value of your house, and after that you can easily create your equity position. The second thing is, your home may be really worth much more than you thought. Get some guidance before doing this. The amount of times I've met with clients that have sold their family home of 20 years only to find out I could of helped them keep it; unfortunately this happens all too often

When it concerns Bankruptcy and houses, another serious consideration is ownership, in many cases houses are purchased in joint names. Simply put a couple may be a house 50/50 using both incomes to make the payments. If one party declares bankruptcy and the other party doesn't, the equity is only factored on the 50 % of the property.

When it comes to Bankruptcy, this is just one of potentially numerous scenarios that are likely when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the house in bankruptcy also. I have to repeat this but get some help on this area of Bankruptcy because it is very tricky and each and every case is different.

If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Canberra on 1300 795 575, or visit our website: www.bankruptcyexpertsCanberra.com.au.

Bankruptcy in Canberra - Who do I speak to?

Should I consult with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anybody knows your financial circumstance well in Canberra, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant doesn't have your best interests at heart when it comes to Bankruptcy, it's that his expertise lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will spend very little to no time on bankruptcy, it's generally done as a post graduate speciality course for those who wish to work in the field. Unless your accountant is an insolvency expert, he will not know that a lot about the implications of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Canberra, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I consult my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Canberra but more than likely it won't do you much good. Solicitors are definitely good at doing things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it concerns Bankruptcy, the specialists in Canberra have the tendency to have either a legal or accounting qualifications, and the main reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner except if you have a law or accounting degree.

Just like there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay an ample price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are plenty of financial counselling services that can help you with this, they have no hidden agendas and they're a fantastic option for letting you analyze your situation when it comes to Bankruptcy. If you end up freaking out constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

There are also charities around Canberra like Lifeline that offer a terrific service. They will be a sounding board if you just need somebody to talk about with you what your possibilities are. Don't let your financial problem destroy your life - ultimately it's just money.

If you need to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Advice Canberra on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Canberra .

Bankruptcy in Canberra - Who do I talk to?

Should I talk with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial circumstance well in Canberra, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant may not have your best interests at heart when it comes to Bankruptcy, it's that his proficiency lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on insolvency, it's generally performed as a post graduate specialty course for those who intend to work in the field. Unless your accountant is an insolvency specialist, he wouldn't know that a lot about the effects of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Canberra, they have the tendency to be large firms with very nice offices who charge accordingly.

Should I talk with my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Canberra but more than likely it won't do you much good. Solicitors are certainly good at doing things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it concerns Bankruptcy, the specialists in Canberra will have either a legal or accounting qualifications, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just like there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay an ample price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to help you with this, they have no hidden agendas and they're a terrific option for letting you analyze your situation when it comes to Bankruptcy. If you are stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures constantly, then get some help.

There are also charitable organizations around Canberra like Lifeline that offer a fantastic service. They will be a sounding board if you just need somebody to discuss with you what your alternatives are. Don't let your financial problem destroy your life - ultimately it's just money.

If you need to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to call Bankruptcy Experts Canberra on 1300 795 575, or visit our website: www.bankruptcyexpertsCanberra.com.au.

Bankruptcy in Canberra - Will I lose my business if I go bankrupt?

When people in Canberra come to me hoping to discuss Bankruptcy, they are always full of questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make things clearer. One of the very most common concerns is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are an owner of a company any shape or size you can keep your business if you want to. In Canberra, businesses that become insolvent have a few options just like liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complicated area so get some qualified advice on this one if you have a business. Generally speaking, the debts in a business and personal debts go hand in hand when a business owner declares bankruptcy. There are several important implications for directors of companies when it comes to Bankruptcy in Canberra: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to retire as a director once you're bankrupt

.

A constraint that applies when you are actually bankrupt as a business owner is that you can be in your very own business as a sole trader only. Certainly there are things you have to make known as a part of that but basically you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For instance, if you run a building company, your license will be suspended once you're bankrupt and therefore you can no longer trade without that license, so make sure you are asking the best questions when it involves licenses and Bankruptcy in Canberra.

However if your business is not impacted directly by such issues, then you'll will need to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your business, then go bankrupt and after that open the doors the next day like virtually nothing had happened. There are laws in place to avoid what is called phoenix companies growing out of the ashes of an old business.

Having said that, it's just a matter of talking to the best people about Bankruptcy. Here in this circumstance you may think you need a liquidator for your business, and you might be right, but keep that in mind every liquidator is different and have their own motives. Liquidators earn money from your liquidation - heaps of money - so just what advice do you believe you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is possibly perilous as it can have very serious implications for directors and business owners. This is due to the fact that it is one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some fundamentals however, that you may benefit from. There is no restriction to the size of the business you run though you are bankrupt. You can employ staff. You can constantly deal with your manufacturers under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the right advice ... If you want to learn more about what to do, precisely where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Canberra on 1300 795 575, or visit our website: www.bankruptcyexpertsCanberra.com.au.

Bankruptcy in Canberra - does it matter if it is voluntary?

When it comes to Bankruptcy Canberra, often people aren't aware that there can be both voluntary, and involuntary bankruptcy - both of these have distinct approaches and guidelines.

Involuntary bankruptcy occurs when a person you owe money to involves the court to declare you bankrupt. Typically when you get one of these particular notices, you have normally 21 days to pay all the debt. If you do not, then the creditor goes back to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the paperwork in and then you are bankrupt.

You can challenge a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're conducted to in the very same way.

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are probable to be made bankrupt by someone, get some assistance and act on that advice. Generally I've found it's always better to know what you can and can't do before you have an individual bankrupt you. Once you are bankrupt, it's generally far too late.

Voluntary Bankruptcy

Nevertheless, when it comes to Bankruptcy, sometimes there are times that it is the most effective option. So you may need to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for everyone of course, but basically I find that one way you could work it out is to figure out just how long it will take you to pay each of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may assist you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the level she was paying her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and fail to remember to pay your $30 phone bill for 6 months more, it's very likely the phone company will default your credit file. That default will remain on your file for 5 years, so for $30 you can have your credit file truly damaged for that period of time - and all of this will impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unjust. The punishment doesn't seem to equate to the crime in my book. So if you already have defaults on your credit report for 5 years, keep in mind that bankruptcy is on your credit file for a total 7 years then its erased completely.

So if your credit rating is a big aspect in trying to decide whether to enter into a Debt Agreement or Personal Insolvency Agreement or Bankruptcy remember they will all sit on your credit file for a total of 7 years. The biggest difference is that with a DA or PIA you pay back the money and still have it on your file for 7 years.

Bankruptcy

I have talked about the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part more people are afraid of when they come to me to discuss their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. Compared to countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government finds that the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which in turn costs the taxpayer anyway.

Bankruptcy wipes every one of your debts including ATO debts with the exception of a few things:.

·         Centrelink Debts, Court Fines like parking and speeding fines.

·         HECS or Fee Help loans.

·         Money to pay for a car accident if the car was not insured.

There is a lot more that can be said about doing this and Bankruptcy in general but the objective of this blog was to help you decide between a few available options. When getting some advice, don't forget that there are always options when it comes to Bankruptcy in Canberra, so do some research, and Good luck!

If you wish to learn more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then feel free to check with Bankruptcy Experts Canberra on 1300 795 575, or visit our website:bankruptcyexpertsCanberra.com.au.