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.

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.

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.

Bankruptcy in Adelaide - Are you going to get bitten?

When people in Adelaide ask me about Bankruptcy, I tell them the classic Native American Fable of the little boy and the Rattlesnake. An old rattlesnake asks a passing young boy to carry him to the mountain top to see one last sunset before he passes away. The boy was hesitant, but the rattlesnake vowed not to bite him in exchange for the ride. They journeyed together only for the snake to eventually bite the boy despite his promise not to do so. The snake's response was 'You knew what I was when you picked me up.'.

Acquiring the right financial advice in Adelaide when it pertains to Bankruptcy is a whole lot like that little boy's journey, filled with risk and danger, and usually skewed for the benefit of the individual supplying the advice. In most cases you'll get bitten unless you know what you've picked up long before you move forward (avoid the rattlesnakes). I learned the problem with getting financial advice as a teenager, and it has been key to Bankruptcy. I'd been working hard for a few years, and saved up a small amount of money I wanted to invest. It was the early 1980s so interest rates were fairly high and investing your money was quite profitable. I spent a few years researching various investment options, and I went to visit a few financial advisors. It was clear that they had more money than I did: they had nice suits and plush offices, they all seemed to exude confidence and have all the solutions. What struck me was that they all had a really different idea of what I should do. This puzzled me so much that it put me off the whole idea of choosing any of them.

I'm sure currently you have read more than enough on the internet to be totally puzzled about Bankruptcy and exactly what to do. It would probably be easier for me to help you comprehend the nature of the financial snakes you might be grasping while you are attempting to get to the bottom of your financial troubles in Adelaide. Essentially, you need to try and figure out what your overarching alternatives are, do your very own research into where to proceed with your strategy for Bankruptcy, and then approach what you feel is best in Adelaide for your needs. Essentially, you have 3 options for who to turn to.

The first option is a Solicitor - This may appear like the go-to possibility when you appear to be in trouble. But certainly there is only just so much help they can give on this matter. There are definitely specialist legal advisors in bankruptcy, but their experience comes with a hefty price.

Another possibility you may think about is your accountant - they are incredibly helpful and vital to the process of managing your business, but for the most part, when you are thinking about Bankruptcy, your accountant won't be much help to you any longer.

Your best option? A Financial Counsellor that can outline debt consolidation, personal insolvency agreements, and pretty much all you have to know when it comes to Bankruptcy.

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