Bankruptcy Geelong, Just what is the Deal with Debts?

Just what Debts are erased if I go Bankrupt?

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

But, put simply 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 which include HECS or FEE-HELP. These debts are not cleared away 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 connected to it. So for example if you buy a new car for $40,000 dollars the security for this car is the actual car itself.

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

Yes. If you have a car loan for $40,000 you can have that debt cleared away 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 must be sold or returned. This is just one component that, when it comes to Bankruptcy, it is vital to get professional assistance - like that offered at Bankruptcy Experts Geelong.

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 sort of debts find some advice because it is not always so self-explanatory. Feel free to call us right here at Bankruptcy Experts Geelong if you have any questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsGeelong.com.au

What about my business or Company debts?

In some cases when it involves 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 this way. And when it comes to Bankruptcy, it can be a complicated area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Experts Geelong we specialise in business and personal debts so call us here at Bankruptcy Experts Geelong if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsGeelong.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be involved and confusing. A question we usually get asked here over at Bankruptcy Experts Geelong is 'what happens to my super if I file for Bankruptcy'? The solution for most is easy, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then very little 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, 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 grown 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 Geelong is not proposing this post is the whole story, if you have any questions feel free to consult with us on 1300 795 575. No matter 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 truth we suggest you find both legal and financial advice before proceeding with any of the actions indicated 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 categorized as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means both of these members must also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this role I would highly urge you to end up being familiar with 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 rather harmful 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 comes about 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 need to consider your extensive structure and make sure it is meeting the basic conditions, involving having a new trustee that is not having issues with Bankruptcy. The Australian Tax office will provide you a 6 month 'grace period' to get this done before you face penalties. And bear in mind, sometimes the absolute 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 frequently keeping the ATO informed of what is happening. This indicates you ought to let them know that you have a bankruptcy complication 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 will need to 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 Geelong for some free advice on 1300 795 575.

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 be 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 clear away the property and halve the proceeds. They would then need to decide if they choose 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 at once and transfer the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even if one single member is running into issues, it can affect the very existence of an SMSF. If you are right now facing this trouble yourself, or with a partner in a SMSF, please seek financial advice to make sure you are satisfying the ATO requirements.

A simple solution ...

As I proposed earlier, a simple solution to your SMSF problem is to put your super back into a normal regulated managed fund before bankruptcy and save yourself all the problems 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 Geelong or visit our website: www.bankruptcyexpertsGeelong.com.au or just call us on 1300 795 575.

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

Bankruptcy Geelong is a difficult to understand process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that virtually nothing concerns people more than the idea of losing the family house. Almost every person is on an emotional level connected to their home - it's where the children have grown up, it's where you enjoy life on a day to day basis.

Will you lose your home if you go bankrupt? The response is a resounding maybe. (not very useful, I know) People typically assume 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 perk of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've agreed to pay back the debt you are in.

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

The duty 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 intrigued).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is executed in a bunch of assorted 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 paying back your debts.

What this seems is that yes the trustee will sell your house right? Not normally. The only reason the trustee will sell off any asset including your house is to get money to repay your debts. If there is no equity in your house 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 automatically reflect the price today.

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

You might wonder, why would the bank want bankrupt customers? wouldn't they need to sell your house and not take the risk? The bank that has kindly lent you the money for your house is making good money every month in interest out of you, month in month out, provided that you keep up to date with your repayments then the bank really wants you in there at all costs. Essentially however it's not the bank's call if the trustee establishes 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 put down the value of your house and the amount you owe on the house. A tip if you are aiming to work out the value of your house: use a registered valuer as this will give you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to reach this figure. When you get a valuer out to your home, make sure 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. These days 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 system is critical to you: one you can have peace of mind ascertaining the market value of your house, and afterwards you can easily develop your equity position. Secondly, your property may be really worth a lot more than you thought. Get some tips before doing this. The number of times I've met clients that have sold their family home of 20 years simply to learn I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another serious consideration is ownership, in most cases houses are purchased 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 does not, the equity is only factored on the 50 % of the property.

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

If you would like 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 Geelong on 1300 795 575, or visit our website: www.bankruptcyexpertsGeelong.com.au.

Bankruptcy in Geelong - Who exactly do I speak to?

Should I consult with my accountant about Bankruptcy?

The answer seems clear doesn't it: if anybody knows your financial situation well in Geelong, 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 in mind when it comes to Bankruptcy, it's that his expertise lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will devote very little to no time on insolvency, it's generally performed as a post graduate speciality program for those who intend to work in the field. Unless your accountant is an insolvency specialist, 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 Geelong, they often tend to be large firms with very nice offices who charge accordingly.

Should I chat with my Solicitor about Bankruptcy?

No! You can talk with your solicitor in Geelong but more than likely it won't do you much good. Solicitors are certainly good at carrying out things lawyers do, like helping 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 Geelong generally have either a legal or accounting background, and the reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner until 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 a considerable price for their expertise.

Should I speak 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 delightful option for helping you analyze your circumstance when it comes to Bankruptcy. If you find yourself stressing out constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

There are also charitable organizations around Geelong like Lifeline that offer an excellent service. They will be a sounding board if you just need a person to go over with you what your alternatives are. Don't let your financial trouble destroy your life - ultimately it's just money.

If you like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Geelong on 1300 795 575, or visit our website: www.bankruptcyexpertsGeelong.com.au.

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

When people in Geelong come to me planning to talk about Bankruptcy, they are typically packed with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things more clear. One of the most normal 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 wish to. In Geelong, businesses that eventually become insolvent have a few options just like liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

Bankruptcy is a complicated area so get some expert advice on this one if you have a business. Generally speaking, the financial debts in a business and personal debts go hand in hand when a business owner goes bankrupt. There are some essential implications for directors of companies when it pertains to Bankruptcy in Geelong: A bankrupt can not be a director of a company, so if you have a pty ltd company you definitely will need to retire as a director as soon as you're bankrupt.

A restriction that applies when you are generally bankrupt as a business owner is that you can be in your own business as a sole trader only. Generally there are things you need to disclose as a part of that but effectively you can still run your business. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. Such as, if you run a building company, your license will be suspended once you're bankrupt and as a consequence you can not trade without that license, so make sure you are asking the right questions when it involves licenses and Bankruptcy in Geelong.

On the other hand 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 acquire heaps of debt in your company, then go bankrupt and afterwards open the doors the next day like not a single thing had happened. There are laws in place to avoid what is called phoenix companies popping up out of the ashes of an old company.

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

When it comes to Bankruptcy, I think that giving generic advice in this area is likely risky as it can have very substantial implications for directors and business owners. This is since it is just one of those cases where what the right guidance for one business owner is the incorrect advice for the other. There are some basics however, that you may benefit from. There is no restriction to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your vendors 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 too confused about what you can and can't do as a business owner, just get the best advice ... If you want to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Geelong on 1300 795 575, or visit our website: .bankruptcyexpertsGeelong.com.au.

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

When it comes to Bankruptcy Geelong, often people aren't aware that there may be both voluntary, and involuntary bankruptcy - each have unique approaches and rules.

Involuntary bankruptcy happens when somebody you owe money to applies to the court to declare you bankrupt. Generally when you get one of these types of notices, you have normally 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the documents in then afterwards you are bankrupt.

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

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this process is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some tips and act on that advice. Generally I've found it's always more ideal to know what you can and can't do before you have someone else bankrupt you. Once you are bankrupt, it's generally far too late.

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may have to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for each person of course, but usually I find that one way you could work it out is to figure out how long it will take you to pay every one 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 rate she was paying her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can really 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 service will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file very seriously damaged for that period of time - and all of this will affect how you have to approach Bankruptcy.

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

So if your credit rating is a big aspect in trying to decide whether to participate in 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 change 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 element most people are afraid of when they come to me to go over their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared with countries like the United States, our bankruptcy laws are quite generous.

I don't pretend to know why that is but a couple of hundred years ago debtors went to prison. These days I suppose the government believes 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 take care of a car accident if the car was not insured.

There is much 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 possible options. When getting some advice, keep in mind that there are always alternatives when it relates to Bankruptcy in Geelong, so do some groundwork, and Good luck!

If you want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to consult with Bankruptcy Experts Geelong on 1300 795 575, or visit our website: bankruptcyexpertsGeelong.com.au.

Bankruptcy in Geelong - Will my income be affected if I go bankrupt?

Bankruptcy Geelong is a challenging process, and you have to make sure you get the right insight. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have to know about going bankrupt is there is no restraint on how much you can earn. However, I will mention that your income is a significant consideration when working through when it comes to Bankruptcy.

The first thing you need to understand about this area of Bankruptcy is just how much you can earn before you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand quantity you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can make an application for a hardship variation that increases the threshold amount, if you have costs in Geelong like medical, child care, serious travel to and from your job, or a situation where your partner used to work but is no longer able to add to the family income.

Some of the informative parts of Bankruptcy is that your employer will not be informed when you file for bankruptcy. Also, Child support is always taken into account in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you give $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.

There are much more issues involving income and what is or isn't considered income - if you're unsure, it's ideal to get skilled advice. The reason you have to consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically practical option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely be taken by the ATO whilst you are bankrupt to chip in toward your tax bill. If you don't have a tax bill then you will keep your tax refund as long as that doesn't take you over your threshold income restrictions.

If you believe that when it comes to Bankruptcy, your case is more complex, then feel free to get qualified advice in Geelong. I may seem like a broken record, but keep in mind that it's always a good idea to work through these options before declaring bankruptcy, due to the fact that once you have filed the paperwork it's too late to change your mind.

If you wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Geelong on 1300 795 575, or explore our website: bankruptcyexpertsGeelong.com.au.