Bankruptcy Townsville, So what is the Deal with Debts?

Precisely what Debts are wiped out if I go Bankrupt?

The quick 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, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) along with any debts arising from uninsured Motor-vehicle claims and educational debts like HECS or FEE-HELP. These debts are not erased when you file for bankruptcy.

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some actual security connected 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 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 could be wiped but the asset needs to be sold or returned. This is just one part that, when it comes to Bankruptcy, it is necessary to get professional assistance - like that provided at Bankruptcy Experts Townsville.

What about my Tax Debts with the ATO can they be erased 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 type of debts find some advice because it is not always so self-explanatory. Feel free to call us right here over at Bankruptcy Experts Townsville if you have any questions on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsTownsville.com.au

What about my business or Company debts?

Sometimes when it concerns Bankruptcy we can help you with your business debts, call us about 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. 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 Experts Townsville we specialise in business and personal debts so contact us here at Bankruptcy Experts Townsville if you have any questions about Bankruptcy on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsTownsville.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and confusing. A question we commonly get asked here at Bankruptcy Experts Townsville is 'what happens to my super if I file for Bankruptcy'? The answer for most is straightforward, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely 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, look into the developing number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has expanded Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it involves Bankruptcy?

Remember Bankruptcy Experts Townsville is not proposing this post is the whole story, if you have any questions feel free to contact us on 1300 795 575. 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 indeed we advise you look for both legal and financial advice before proceeding with any of the actions indicated in this article.a

What is a Disqualified Person?

First and foremost, if you are considering Bankruptcy, you can not be a part of a SMSF. Why? Because if you are taking on 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 each of these members need to also be the individual trustees. The role of trustee causes a lot of legal rules, and if you are in this position I would highly urge you to end up being aware of 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 destructive 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 comes to pass 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 need 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 offer you a 6 month 'grace period' to get this done before you face penalties. And consider, 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 continuously keeping the ATO informed of what is happening. This suggests you have to let them know that you have a bankruptcy issue 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 need to also notify ASIC of their resignation.

Through 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 Experts Townsville for some free advice on 1300 795 575.

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 be their duty 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 want to decide if they wish to remain as a single member SMSF, or if they would like to roll all of it into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets immediately and transfer the liquid assets to the managed fund.

From this you can see how when it comes to Bankruptcy, even though one single member is facing issues, it can affect the very existence of an SMSF. If you are right now facing this issue 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 recommended earlier, a basic solution to your SMSF problem is to put your super back into a normal regulated managed fund before 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, call us at Bankruptcy Experts Townsville or visit our website: www.bankruptcyexpertsTownsville.com.au or just call us on 1300 795 575.

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

Bankruptcy Townsville is a complex process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that practically nothing worries people more than the notion of losing the family house. Almost every person is psychologically connected to their home - it's where the kids have grown up, it's where you appreciate life on a day to day basis.

Will you lose your home if you go bankrupt? The reply is a resounding maybe. (not very helpful, I know) People generally imagine 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 Townsville 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 image.

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

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is accomplished 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 further role is to sell off any assets that can contribute to paying back your debts.

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

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

You might wonder, why would the bank want bankrupt customers? wouldn't they prefer 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, just as long as you keep up to date with your repayments then the bank wants you in there at all costs. Ultimately however it's not the bank's call if the trustee determines that there is ample 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 note 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 give 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 house, make certain you tell the valuer to value the property for a quick sale, see to it 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 sensitive sale. Nowadays 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 control the result. The idea is that you want a real 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 house may be really worth a lot more than you thought. Get some assistance before doing this. The number of times I've seen 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 concerns Bankruptcy and houses, another serious consideration is ownership, in many cases houses are bought 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 down to Bankruptcy, this is just one of possibly hundreds of scenarios that are possible when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the home in bankruptcy also. I need to repeat this but get some help on this area of Bankruptcy because it is very tricky and every case is different.

If you need to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Experts Townsville on 1300 795 575, or visit our website: www.bankruptcyexpertsTownsville.com.au.

Bankruptcy in Townsville - Who do I talk to?

Should I talk with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anybody knows your financial circumstance well in Townsville, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant may not have your best interests at heart when it comes to Bankruptcy, it's that his knowledge lie in helping you save you money at tax time, minimizing your tax liability and lodging your BAS.

Most accounting degrees will devote very little to no time on bankruptcy, it's generally carried out as a post graduate specialty course for those who want to work in the field. Unless your accountant is an insolvency expert, he wouldn't 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 Townsville, they have the tendency to be large firms with very nice office spaces who charge accordingly.

Should I talk to my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Townsville 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 keeping you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Townsville have the tendency to 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 as there are a small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay a sizable price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services to aid you with this, they have no hidden agendas and they're a great option for really helping you think through 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 constantly, then get some help.

There are also charities around Townsville like Lifeline that offer a wonderful service. They will be a sounding board if you just need a person to discuss with you what your choices are. Don't let your financial issue destroy your life - ultimately it's just money.

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 call Bankruptcy Experts Townsville on 1300 795 575, or visit our website: www.bankruptcyexpertsTownsville.com.au.

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

When people in Townsville come to me wanting to discuss Bankruptcy, they are always full of questions. The internet has plenty of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make things more clear. One of the very most normal concerns is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are a manager of a company any shape or size you can maintain your business if you would like to. In Townsville, businesses that end up being insolvent have a few options including liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complex 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 hand in hand when a business owner goes bankrupt. There are several significant implications for directors of companies when it comes to Bankruptcy in Townsville: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to resign as a director after you're bankrupt.

A constraint that applies when you are actually bankrupt as a business owner is that you may be in your own business as a sole trader only. There are things you should make known as an aspect of that but in essence you can still run your company. 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 consequently you can not trade without that license, so make sure you are asking the ideal questions when it involves licenses and Bankruptcy in Townsville.

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 rack up heaps of debt in your business, then go bankrupt then open the doors the next day like nothing at all had happened. There are laws in place to stop what is called phoenix companies popping up out of the ashes of an old company.

Having said that, it's just an issue of consulting with the correct people about Bankruptcy. Here in this situation you may think you need a liquidator for your company, and you could be right, but remember that every liquidator is unique 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 consider that giving generic advice in this area is likely risky 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 inappropriate 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 while you are bankrupt. You can employ staff. You can continue to deal with your manufacturers under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it concerns Bankruptcy, don't get extremely uneasy about what you can and can't do as a business owner, just get the appropriate advice ... If you need to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Experts Townsville on 1300 795 575, or visit our website:.bankruptcyexpertsTownsville.com.au.

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

When it comes to Bankruptcy Townsville, often people aren't aware that there are both voluntary, and involuntary bankruptcy - both of these have different approaches and rules.

Involuntary bankruptcy arises when a person you owe money to involves the court to declare you bankrupt. Generally when you get one of these types of notices, you have 21 days to pay all the debt. If you do not, then the creditor returns 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 documentation in and then you are bankrupt.

You can object to a bankruptcy notice by going to court 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 difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're overseen to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are probable to be made bankrupt by someone, get some advice and act on that advice. Generally I've found it's always much better to know what you can and can't do before you have someone bankrupt you. Once you are bankrupt, it's typically too late.

Voluntary Bankruptcy

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

This question is not the very same for everyone of course, but ordinarily I find that one way you could work it out is to figure out how long it will take you to pay each one 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 spoke 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 overlook to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file 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 unjust. The punishment doesn't seem to equal the crime in my book. So if you currently 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 issue in trying to decide whether to take part 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 mentioned the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part 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 country the arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. As compared to countries like the United States, our bankruptcy laws are extremely good.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government thinks 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 all of your debts including ATO debts except for 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 available options. When getting some advice, don't forget that there are always options when it comes to Bankruptcy in Townsville, so do some groundwork, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Townsville on 1300 795 575, or visit our website:bankruptcyexpertsTownsville.com.au.

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

Bankruptcy Townsville is a confusing process, and you have to ensure you get the right recommendations. And when it comes to your income being affected, the answer to the question is maybe. The first thing you have to know about going bankrupt is there is no restraint on how much you can earn. However, I will point out that your income is a significant consideration when working through when it comes to Bankruptcy.

The first thing you need to know 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 of money 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 look for a hardship variation that increases the threshold amount, if you have costs in Townsville like medical, child care, sizable travel to and from your job, or a circumstance where your spouse used to work but is not able to add to the household income.

Some of the informative parts of Bankruptcy is that your employer will not be told when you file for bankruptcy. Also, Child support is always looked at 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 modified net income limit will be $55,332.10.

There are a lot more issues involving income and what is or isn't regarded as income - if you're not exactly sure, it's best 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 viable 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 so long as that doesn't take you over your threshold income caps.

If you think when it comes to Bankruptcy, your circumstance is more complicated, then simply get experienced advice in Townsville. I may sound like a broken record, but remember that it's always a great idea to work through these options prior to declaring bankruptcy, since once you have filed the paperwork it's too late to change your mind.

If you want to find out more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Townsville on 1300 795 575, or visit our website: bankruptcyexpertsTownsville.com.au.