Monday, August 7, 2017

Bankruptcy Adelaide, Just what is the Deal with Debts?

Precisely what Debts are wiped out if I go Bankrupt?

The basic answer is that when it comes to Bankruptcy most debts are wiped, and I have provided 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 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 genuine security affixed 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 removed if I file for bankruptcy?
Yes. If you have a car loan for $40,000 you can have that debt removed 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 might be wiped but the asset has to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is essential to get professional help - like that provided at Bankruptcy Experts Adelaide.

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 erased with bankruptcy. If you have a business with any kind of debts get some advice because it is not always so easy. Feel free to call us right here over at Bankruptcy Experts Adelaide if you have any type of questions on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsadelaide.com.au

What about my business or Company debts?

In some cases when it involves Bankruptcy we can aid you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally 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 Adelaide we specialise in business and personal debts so give us a call here at Bankruptcy Experts Adelaide if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsadelaide.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be complicated and difficult to understand. A question we often get asked here at Bankruptcy Experts Adelaide is 'what happens to my super if I apply for Bankruptcy'? The answer for most is straightforward, if your super is usually in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely 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, take into account the evolving number of members of Self-Managed Super Funds ("SMSFs") in 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 comes down to Bankruptcy?

Remember Bankruptcy Experts Adelaide is not suggesting this short article is the entire story, if you have any questions feel free to consult with us on 1300 795 575. Regardless if you call us or somebody else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we encourage you get 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 grouped as a 'disqualified person'. And a disqualified individual 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 must also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this position I would highly urge 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 harmful to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have to restructure my SMSF Fund after I'm bankrupt?

So what takes place 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 whole structure and make sure it is meeting the basic conditions, including things like having a new trustee that is not dealing with 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 most ideal 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 indicates 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 need to also notify ASIC of their resignation.

In 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 uncertain call Bankruptcy Experts Adelaide 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 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 take away the property and halve the proceeds. They would then have to decide if they choose 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 at once and transfer 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 matter yourself, or with a partner in a SMSF, please seek financial advice to make sure you are meeting the ATO requirements.

A simple solution ...


As I suggested earlier, a basic solution to your SMSF issue 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 finding proper advice is the best first step. If you want to discuss your options further, give us a call at Bankruptcy Experts Adelaide or visit our website: www.bankruptcyexpertsAdelaide.com.au or just call us on 1300 795 575.

Wednesday, January 11, 2017

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


Bankruptcy Adelaide is a difficult process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that nothing at all troubles people more than the idea of losing the family home. Almost every person is on an emotional level connected to their home - it's where the kids have grown up, it's where you take pleasure in life on a day to day base.

Will you lose your home if you go bankrupt? The solution is a resounding maybe. (not very useful, I know) People generally think 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 agreed to pay back the debt you are in.

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

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

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is executed in a bunch of various ways but it mainly comes down to income and assets. The trustees role is to collect payments beyond your income threshold. The other role is to sell off any assets that can contribute to fixing 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 pay back your debts. If there is no equity in your home then it's pointless to sell your home. This is happening increasingly more 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 word of advice here if you have a house in Adelaide and are looking at Bankruptcy: get a specialist to help you through this process, there are plenty of variables in these scenarios that should be considered.

You might wonder, why would the bank want bankrupt clients? 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 earning 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 desires you in there at all costs. Ultimately however it's not the bank's call if the trustee determines that there is lots 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 jot down the value of your house and the portion 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 offer 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, ensure that 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 give 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 realistic sell now figure.

There are two main 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 then you can easily set up your equity position. Second of all, your house may be really worth a lot more than you thought. Get some assistance before doing this. The amount of times I've met with clients that have sold their family home of 20 years just to find out I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another major consideration is ownership, in many cases houses are bought in joint names. In other words 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 concerns Bankruptcy, this is just one of probably numerous scenarios that are likely when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the house in bankruptcy also. I should repeat this but get some advice on this area of Bankruptcy because it is very tricky and every case is different.


If you really 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 Adelaide on 1300 795 575, or visit our website: www.bankruptcyexpertsAdelaide.com.au.

Wednesday, November 16, 2016

Bankruptcy in Adelaide - Who do I speak to?


Should I talk to my accountant about Bankruptcy?
The answer seems clear doesn't it: if anyone knows your financial circumstance well in Adelaide, 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 experience lie in helping you save you money at tax time, lowering 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 specialty course for those who intend to work in the field. Unless your accountant is an insolvency expert, he would not 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 Adelaide, 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 to your solicitor in Adelaide 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 trying to keep you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Adelaide normally 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 as there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay an ample price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?
Yes! There are a lot of financial counselling services to help you through this, they have no hidden agendas and they're a great option for letting you analyze your situation when it comes to Bankruptcy. If you end up stressing out constantly, not sleeping, not eating or over-eating and thinking about money pressures regularly, then get some help.

There are also charities around Adelaide like Lifeline that offer a terrific service. They will be a sounding board if you just need a person to review with you what your options are. Don't let your financial trouble destroy your life - ultimately it's just money.


If you really want to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Adelaide on 1300 795 575, or visit our website: www.bankruptcyexpertsAdelaide.com.au.

Monday, August 8, 2016

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


When people in Adelaide come to me trying to discuss Bankruptcy, they are constantly full of questions. The internet is full 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 most natural troubles is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are a manager of a company any shape or size you can keep your business if you want to. In Adelaide, businesses that eventually are insolvent have a few options like liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complicated area so get some experienced advice on this one if you have a business. Generally speaking, the financial debts in a business and personal debts go together when a business owner declares bankruptcy. There are a few crucial implications for directors of companies when it pertains to Bankruptcy in Adelaide: 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 bankrupt as a business owner is that you may be in your own business as a sole trader only. Generally there are things you have to reveal as a part of that but essentially 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 comes to licenses and Bankruptcy in Adelaide.

However if your business is not impacted directly by such issues, then you'll 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 business, then go bankrupt and afterwards open the doors the next day like not a single thing had happened. There are laws in place to stop what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of consulting with the right people about Bankruptcy. In this circumstance you may believe you need a liquidator for your company, and you could be right, but remember that every liquidator is different and have their own motives. Liquidators profit from your liquidation - heaps of money - so exactly what advice do you believe you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is possibly dangerous as it can have very considerable implications for directors and business owners. This is since it is one of those cases where what the right guidance for one business owner is the incorrect advice for the other. There are some fundamentals however, that you may benefit from. There is no reduce to the size of the business you run when you are bankrupt. You can employ staff. You can continue to deal with your suppliers 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 confused about what you can and can't do as a business owner, just get the appropriate advice ... If you would like to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to consult Bankruptcy Experts Adelaide on 1300 795 575, or visit our website: www.bankruptcyexpertsAdelaide.com.au.

Monday, July 4, 2016

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


When it comes to Bankruptcy Adelaide, normally people aren't aware that there can be both voluntary, and involuntary bankruptcy - the two 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 kinds of notices, you have 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documents in and then you are bankrupt.

You can contest a bankruptcy notice by going to court following the 21 days have expired and put your case forward, to prevent it going to the next level. Other than the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen 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 prone to be made bankrupt by someone, get some suggestions 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 someone bankrupt you. Once you are bankrupt, it's normally far too late.

Voluntary Bankruptcy

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

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

Once, I had an 80 year old pensioner, who came 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 off 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 remain 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 impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unjustifiable. The punishment doesn't seem to match 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 change is that with a DA or PIA you repay the money and nevertheless have it on your file for 7 years.


Bankruptcy

I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element 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 specific country the arrangements 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 good.

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 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 costs the taxpayer anyway.

Bankruptcy wipes all 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 much more that can be said about 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 choices when it involves Bankruptcy in Adelaide, so do some groundwork, and Good luck!


If you wish to find out more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to get in touch with Bankruptcy Experts Adelaide on 1300 795 575, or visit our website:bankruptcyexpertsAdelaide.com.au.

Monday, May 23, 2016

Bankruptcy in Adelaide - Will my income be altered if I go bankrupt?


Bankruptcy inAdelaide is a intricate process, and you have to ensure you get the right suggestions. 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 constraint on how much you can earn. However, I will say that your income is a major consideration when working through when it comes to Bankruptcy.

The very first thing you need to keep in mind about this area of Bankruptcy is the amount 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 amount you earn annually. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can get a hardship variation that raises the threshold amount, if you have financial commitments in Adelaide like medical, child care, substantial travel to and from work, or a circumstance where your partner used to work but is no longer able to support the household income.

Some of the insightful parts of Bankruptcy is that your employer will not be notified 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 thought about, for example if you provide $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

There are a lot more issues surrounding income and what is or isn't thought of as income - if you're not sure, it's a good idea to get qualified advice. The reason you should consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely be taken by the ATO while 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 caps.

If you think when it comes to Bankruptcy, your situation is more intricate, then simply get specialist advice in Adelaide. I may seem like a broken record, but remember that it's always a smart idea to work through these options before declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.


If you would like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Adelaide on 1300 795 575, or explore our website: www.bankruptcyexpertsAdelaide.com.au.