Bankruptcy Brisbane, Just what is the Deal with Debts?

So what Debts are erased if I go Bankrupt?

The quick answer is that when it concerns Bankruptcy most debts are wiped, and I have featured a compendium below for you to look at.

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

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some real security connected 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 erased if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt wiped out if you simply return 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 needs to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is vital to get professional help - like that you can find at Bankruptcy Experts Brisbane.

What about my Tax Debts with the ATO can they be erased 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 sort of debts receive some advice because it is not always so straightforward. Feel free to call us right here over at Bankruptcy Experts Brisbane if you have any type of questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsBrisbane.com.au

What about my business or Company debts?

Sometimes when it comes to Bankruptcy we can help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Usually you may need to liquidate a company to deal with the debt this way. And 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 Brisbane we specialise in business and personal debts so give us a call here at Bankruptcy Experts Brisbane if you have any questions about Bankruptcy on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsBrisbane.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and difficult to understand. A question we normally get asked here at Bankruptcy Experts Brisbane is 'what happens to my super if I file for Bankruptcy'? The solution for most is straightforward, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely nothing happens; your super is 100 % safe when it comes down to Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, look at the expanding number of members of Self-Managed Super Funds ("SMSFs") in recent years; the ATO tells us it has expanded Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes to Bankruptcy?

Remember Bankruptcy Experts Brisbane is not implying this short article is the whole story, if you have any questions feel free to get in touch with us on 1300 795 575. Whether or not you call us or somebody else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we strongly recommend you find both legal and financial advice before proceeding with any of the actions suggested in this article.

What is a Disqualified Person?

First and foremost, if you are taking into account Bankruptcy, you can not be a part of a SMSF. Why? Because if you are going up against bankruptcy, you will be classified as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means the two of these members will need to also be the individual trustees. The duty of trustee sets a lot of legal rules, and if you are in this position I would highly encourage you to end up being familiar with them all-- including 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 imagine the process of Bankruptcy for a SMSF is rather convoluted.

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

So what comes to pass 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 whole structure and make sure it is meeting the basic conditions, including things like 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 consider, sometimes the best plan would be to simply roll the fund into an industry or corporate fund.

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

During the course of that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are not sure call Bankruptcy Experts Brisbane 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 need to appoint a new director, and it will then end up being their obligation 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 remove the property and halve the proceeds. They would then have to decide if they wish to remain as a single member SMSF, or if they want to roll all of it into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets right away and move the liquid assets to the managed fund.

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

A simple solution ...

As I recommended earlier, a basic solution to your SMSF problem is to put your super back into a normal regulated managed fund before bankruptcy and save yourself all the headaches outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your possibilities further, give us a call at Bankruptcy Experts Brisbane or visit our website: www.bankruptcyexpertsBrisbane.com.au or just call us on 1300 795 575.

Bankruptcy in Brisbane - Will I lose my home if I go bankrupt?

Bankruptcy Brisbane is a confusing process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that not a thing worries people more than the thought of losing the family house. Almost everybody is psychologically connected to their home - it's where the kids have grown, it's where you take pleasure in life on a day to day base.

Will you lose your home if you go bankrupt? The answer is a resounding maybe. (not very helpful, I know) People generally believe it's an inevitable consequence and a part of Bankruptcy, and therefore 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 Brisbane 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 clearer idea.

The function of the bankruptcy trustee is to firstly follow the regulation of the bankruptcy act 1966 (it's a very plain read about 600 pages if you are curious).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is accomplished in a bunch of distinct ways but it mainly comes down to income and assets. The trustees role is to collect payments over your income threshold. The other role is to sell any assets that can contribute to fixing your debts.

What this resembles 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 pay back your debts. If there is no equity on your property then it's pointless to sell your home. This is happening much more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not necessarily reflect the price today.

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

You might wonder, why would the bank want bankrupt clients? wouldn't they prefer to sell your house and not take the risk? The bank that has kindly lent you the money for your house is earning good money every month in interest out of you, month in month out, provided that you keep up to date with your monthly payments then the bank wants you in there at all costs. Ultimately however it's not the bank's call if the trustee decides that there is a lot 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 quantity you owe on the house. A tip if you are attempting to work out the value of your house: use a registered valuer as this will offer you peace of mind, don't use your neighbours' gut feel advice or a real estate agents advice to come to this figure. When you get a valuer out to your property, make sure 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 delicate sale. Nowadays that's not the case, but if you meet them and tell them you need to sell the house in the next 30 days you may sway the result. The idea is that you want a realistic sell now figure.

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

When it comes to Bankruptcy and houses, another primary consideration is ownership, in most cases houses are acquired 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 likely hundreds of 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 need to repeat this but get some guidance on this area of Bankruptcy because it is very tricky and every case is different.

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Brisbane on 1300 795 575, or visit our website: www.bankruptcyexpertsBrisbane.com.au.