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

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.

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.