Wednesday, September 26, 2018

Losing your house: Just how much do you know of Bankruptcy in Darwin?




The most important question people have when they come to our company about Bankruptcy is normally 'Can I keep my house?' and in many cases the truth is yes, you can manage to keep your house.

The only reason you can be compelled to sell your family home if you file for bankruptcy is actually because you have a lot of equity in the home that it is viewed as an asset. Please check out these straightforward hypothetical case studies below to get your head around Bankruptcy and how it impacts houses in Australia. Remember If you have to know more about Bankruptcy and houses feel free to consult with us here at Bankruptcy Advice Darwin on 1300 879 867, or go to our website: www.bankruptcy-advice.com.au/Darwin.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue bought a house in a mining town for $450,000. At this time the mining boom was keeping all the property prices nice and high. Now they are needing to look at Bankruptcy given that they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their house is still only worth $450,000 after all these years, to make sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets close by have sold for lately.

However they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.
Current Mortgage Value = $450,000.
Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their home when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period the trustee will write to them and ask if they would like to take over ownership of their house again and so long as it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is usually somewhere between $3,000 and $5,000 to cover the legal costs of modifying the land title deed etc.
Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle bought a townhouse in a great suburb of Darwin for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.
Current Mortgage Value = $800,000.
Net Equity Value = $100,000.

Due to a recent business problem Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt aside from the mortgage. Bill cannot pay his debts therefore he is reviewing Bankruptcy. Michelle is bothered that she too may need to declare bankruptcy or be forced into it due to the house loan.

With this particular case the trustee is required to access or get their hands on Bill's part of the equity which is $50,000 less selling costs. They can do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely with this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the opportunity to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and complicated, these two case studies above are just the tip of the iceberg as far as your options in Darwin are concerned. If you need to know more about Bankruptcy and houses feel free to call us here at Bankruptcy Advice Darwin on 1300 879 867, or head to our website: www.bankruptcy-advice.com.au/Darwin.com.au.

Losing your house: How much do you know about Bankruptcy in Canberra?




The greatest concern a lot of people have when they come to our business about Bankruptcy is simply 'Can I manage to keep my house?' and sometimes the answer is yes, you can keep your house.

The only reason you may be driven to sell your family home if you file for bankruptcy is because you have so much equity in the home that it is regarded as an asset. Please go over these basic hypothetical case studies below to get your head around Bankruptcy and how it has an effect on houses in Australia. Remember If you need to know more regarding Bankruptcy and houses feel free to contact us here at Bankruptcy Advice Canberra on 1300 879 867, or check out our website: www.bankruptcy-advice.com.au/Canberra.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was helping keep all the property prices nice and high. Now they are needing to look at Bankruptcy considering they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really wish to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their house is currently only worth $450,000 after all these years, to make sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets nearby have sold for recently.

Having said that they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.
Current Mortgage Value = $450,000.
Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their house when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period the trustee will write to them and ask if they would like to take over ownership of their house again and so long as it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is typically somewhere between $3,000 and $5,000 to cover the legal costs of modifying the land title deed etc.
Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a wonderful suburb of Canberra for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.
Current Mortgage Value = $800,000.
Net Equity Value = $100,000.

As a result of a recent business downfall Bill is about $240,000 in debt. Michelle who works in banking has a separate job and no other debt except for the mortgage. Bill cannot pay his debts therefore he is looking into Bankruptcy. Michelle is worried that she too may need to file for bankruptcy or be obliged into it due to the house loan.

Within this particular case the trustee is required to access or get their hands on Bill's part of the equity which is $50,000 less selling costs. They can do this in a few ways; 1. Make them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely in this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the ability to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is confusing and demanding, these two case studies above are just the tip of the iceberg as far as your options in Canberra are concerned. If you need to know more about Bankruptcy and houses feel free to get in touch with us here at Bankruptcy Advice Canberra on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Canberra.com.au.

Losing your house: Just how much do you know of Bankruptcy in Brisbane?




The primary concern a lot of people have when they come to our business about Bankruptcy is generally 'Can I manage to keep my house?' and sometimes the truth is yes, you can manage to keep your house.

The only reason you are going to be obliged to sell your family home when you file for bankruptcy is due to the fact that you have a lot of equity in the home that it is deemed an asset. Please read through these basic hypothetical case studies below to get your head around Bankruptcy and how it impacts houses in Australia. Remember If you have to know more regarding Bankruptcy and houses feel free to contact us here at Bankruptcy Advice Brisbane on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Brisbane.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was helping keep all the property prices nice and high. Now they are needing to look at Bankruptcy because they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their home is still only worth $450,000 after all these years, to be sure they searched www.realestate.com.au/ sold section of the website to see what other homes in the streets close by have sold for fairly recently.

However they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.
Current Mortgage Value = $450,000.
Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their home when they go bankrupt, as long as they keep up the mortgage payments then all will be well for these people for the 3 years they are in bankruptcy.

At the end of the bankruptcy period the trustee will write to them and ask if they would like to take over ownership of their house again and as long as it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is typically somewhere between $3,000 and $5,000 to cover the legal costs of altering the land title deed etc.
Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a wonderful suburb of Brisbane for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.
Current Mortgage Value = $800,000.
Net Equity Value = $100,000.

Due to a recent business downfall Bill is about $240,000 in debt. Michelle who works in banking has a separate job and no other debt except for the mortgage. Bill cannot pay his debts so he is reviewing Bankruptcy. Michelle is bothered that she too may need to file for bankruptcy or be compelled into it thanks to the house loan.

Within this particular case the trustee is required to access or get their hands on Bill's part of the equity which is $50,000 less selling costs. They may do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely in this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the opportunity to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and complicated, these two case studies above are just the tip of the iceberg as far as your options in Brisbane are concerned. If you need to know more about Bankruptcy and houses feel free to call us here at Bankruptcy Advice Brisbane on 1300 879 867, or go to our website: www.bankruptcy-advice.com.au/Brisbane.com.au.

Monday, August 7, 2017

Bankruptcy Brisbane, What is the Deal with Debts?


Precisely what Debts are erased if I go Bankrupt?

The straightforward answer is that when it involves Bankruptcy most debts are wiped, and I have provided 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) in addition to any debts arising from uninsured Motor-vehicle claims and educational debts like HECS or FEE-HELP. These debts are not eliminated 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 for instance 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 removed if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt eliminated 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 could be wiped but the asset will need to be sold or returned. This is just one aspect that, when it comes to Bankruptcy, it is essential to get professional guidance - like that readily available at Bankruptcy Advice Brisbane.

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

Yes they can, both business and personal debts owing to the ATO can be eliminated with bankruptcy. If you have a business with any kind of debts get some advice because it is not always so self-explanatory. Feel free to call us here at Bankruptcy Advice Brisbane if you have any questions on 1300 879 867. Or feel free to check out our website: www.bankruptcy-advice.com.au/Brisbane.com.au

What about my business or Company debts?


Sometimes when it concerns Bankruptcy we can really 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 that 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 Advice Brisbane we specialise in business and personal debts so contact us here at Bankruptcy Advice Brisbane if you have any questions regarding Bankruptcy on 1300 879 867. Or feel free to head to our website: www.bankruptcy-advice.com.au/Brisbane.com.au

Sunday, May 21, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be complicated and difficult to understand. A question we often get asked here over at Bankruptcy Advice Perth is 'what happens to my super if I file for Bankruptcy'? The answer for most is simple, if your super is in a regulated fund or industry fund like Sunsuper or Host Plus then virtually nothing happens; your super is 100 % safe when it involves 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") lately; the ATO tells us it has grown Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes down to Bankruptcy?

Remember Bankruptcy Advice Perth is not proposing this article is the complete story, if you have any questions feel free to contact us on 1300 879 867. Whether or not you call us or another person it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we advise you find 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 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 labeled as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem due to the fact that usually most of the SMSFs are just 2 people, which means the two of these members must also be the individual trustees. The duty of trustee causes a lot of legal rules, and if you are in this role I would highly encourage you to be aware of 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 quite 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 transpires if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will have to be reorganized. This means that you will have to consider your entire structure and make certain it is meeting the basic conditions, including things like having a new trustee that is not suffering from issues with Bankruptcy. The Australian Tax office will supply you a 6 month 'grace period' to get this done before you face penalties. And bear in mind, sometimes the very 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 continuously keeping the ATO informed of what is happening. This suggests you have 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 need 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 uncertain call Bankruptcy Advice Perth for some free advice on 1300 879 867.

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 become their responsibility to oversee the sale and relocation 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 take away the property and halve the proceeds. They would then want to decide if they would like 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 would need to sell all assets as soon as possible and transfer the liquid assets to the managed fund.

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

A simple solution ...


As I proposed 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 frustrations outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your options further, give us a call at Bankruptcy Advice Perth or visit our website: www.bankruptcy-advice.com.au/Perth.com.au or just call us on 1300 879 867.

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be convoluted and confusing. A question we often get asked here at Bankruptcy Advice Brisbane is 'what happens to my super if I declare 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 virtually nothing 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, look at the increasing number of members of Self-Managed Super Funds ("SMSFs") lately; 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 Advice Brisbane is not suggesting this post is the complete story, if you have any questions feel free to call us on 1300 879 867. 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 actually we encourage you seek 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 being confronted by bankruptcy, you will be classified 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 job of trustee poses a lot of legal rules, and if you are in this role I would highly recommend you to be familiar with them all-- for example the fact that you can not 'know or suspect' that one of you are bankrupt. So you can notice how an individual bankruptcy can be rather damaging to a SMSF and as you can assume 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 transpires if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will need to be restructured. This means that you will want to consider your extensive structure and make certain it is meeting the basic conditions, including having a new trustee that is not suffering from issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And bear 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 frequently keeping the ATO informed of what is happening. This indicates 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 will need to 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 Advice Brisbane for some free advice on 1300 879 867.

What if I use a single member fund?

If you are a single member fund, then you will need to appoint a new director, and it will then become 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 have to resign and the other member will clear away the property and halve the proceeds. They would then need to decide if they want to remain as a single member SMSF, or if they intend to roll it all into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets at once and transfer the liquid assets to the managed fund.

From this you can see how when it comes to Bankruptcy, even when one single member is facing issues, it can affect the very existence of an SMSF. If you are actually 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 proposed earlier, a basic solution to your SMSF problem 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 finding proper advice is the best 1st step. If you want to discuss your options further, give us a call at Bankruptcy Advice Brisbane or visit our website: www.bankruptcy-advice.com.au/Brisbane.com.au or just call us on 1300 879 867.

Wednesday, January 11, 2017

Bankruptcy in Brisbane - Will I lose my house 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 virtually nothing troubles people more than the idea of losing the family house. Almost every person is emotionally connected to their home - it's where the children have grown up, it's where you enjoy 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 assume it's an inevitable consequence and a part of Bankruptcy, and because of this 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 benefit 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 theory behind the Bankruptcy process as administered by the trustee, then you'll have a more clear picture.

The responsibility of the bankruptcy trustee is to firstly agree to the regulation of the bankruptcy act 1966 (it's a very dry read about 600 pages if you are eager).

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

What this seems like is that yes the trustee will sell your house right? Not necessarily. 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 in your home then it's pointless to sell your home. This is happening increasingly since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not automatically reflect the price today.

A quick tip here if you have a house in Brisbane and are looking at Bankruptcy: get a professional to help you through this process, there are a lot of variables in these scenarios that should 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 kindly lent you the money for your house is generating 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 wants you in there at all costs. Essentially however it's not the bank's call if the trustee determines 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 mark 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 tips or a real estate agents advice to come to this figure. When you get a valuer out to your property, make certain you tell the valuer to value the property for a quick sale, make certain you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to provide 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 let them know you need to sell your home in the next 30 days you may control the result. The idea is that you want a realistic sell now figure.

There are two reasons this valuation technique is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, then afterwards you can easily set up your equity position. Second of all, your property may be really worth even more than you thought. Get some suggestions before doing this. The number of times I've met clients that have sold their family home of 20 years just to discover I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another significant consideration is ownership, in most cases houses are acquired in joint names. To puts it simply 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 possibly numerous scenarios that are likely when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I should repeat this but get some assistance on this area of Bankruptcy because it is very tricky and every single 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 contact Bankruptcy Advice Brisbane on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Brisbane.