Monday, August 7, 2017

Bankruptcy Melbourne, What is the Deal with Debts?


Just what Debts are erased if I go Bankrupt?

The quick answer is that when it comes to Bankruptcy most debts are wiped, and I have added 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) together with any debts arising from uninsured Motor-vehicle claims and educational debts including HECS or FEE-HELP. These debts are not eliminated when you file for bankruptcy.

What about Secured Debts?

A secured debt is a car loan or a home loan; it is a debt that has some definite security attached 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 removed if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt wiped out 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 might be wiped but the asset must be sold or returned. This is just one part that, when it comes to Bankruptcy, it is important to get professional assistance - like that provided at Bankruptcy Experts Melbourne.

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 removed with bankruptcy. If you have a business with any kind of debts receive some advice because it is not always so straightforward. Feel free to call us right here over at Bankruptcy Experts Melbourne if you have any questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsMelbourne.com.au

What about my business or Company debts?


Sometimes when it comes to Bankruptcy we can really help you with your business debts, call us about this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Generally 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 Melbourne we specialise in business and personal debts so call us here at Bankruptcy Experts Melbourne if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsMelbourne.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be complicated and confusing. A question we typically get asked here at Bankruptcy Experts Melbourne is 'what happens to my super if I declare Bankruptcy'? The solution for most is simple, if your super is usually in a regulated fund or industry fund like Sunsuper or Host Plus then virtually nothing happens; your super is 100 % safe when it involves Bankruptcy.



What if I have a Self Managed Super Fund?

This is a growing concern, take into consideration the increasing number of members of Self-Managed Super Funds ("SMSFs") in recent 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 comes down to Bankruptcy?

Remember Bankruptcy Experts Melbourne is not indicating this post is the complete story, if you have any questions feel free to call us on 1300 795 575. Whether or not you call us or someone else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we encourage you obtain both legal and financial advice before proceeding with any of the actions recommended 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 coping with bankruptcy, you will be identified 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 position of trustee poses a lot of legal rules, and if you are in this role I would highly recommend you to end up being familiar with them all-- including 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 detrimental 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 happens if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will have to be reorganized. This means that you will want to consider your extensive structure and ensure it is meeting the basic conditions, including having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will give you a 6 month 'grace period' to get this done before you face penalties. And bear in mind, sometimes the best plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale reorganizing issues, there is a lot of paperwork to deal with too, and you need to be constantly keeping the ATO informed of what is happening. This suggests you ought to let them know that you have a bankruptcy concern 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.

Through that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are unsure call Bankruptcy Experts Melbourne 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 need 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 take away the property and halve the proceeds. They would then have 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 will need to sell all assets immediately and transfer the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even when one single member is running into issues, it can affect the very existence of an SMSF. If you are at the moment facing this matter 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 recommended earlier, a simple solution to your SMSF problem is to put your super back into a normal regulated managed fund prior to bankruptcy and save yourself all the problems outlined above. Bankruptcy is never easy, but receiving proper advice is the best 1st step. If you want to discuss your possibilities further, contact us at Bankruptcy Experts Melbourne or visit our website: www.bankruptcyexpertsMelbourne.com.au or just give us a call on 1300 795 575.

Wednesday, January 11, 2017

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


Bankruptcy Melbourne is a difficult process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that not much worries people more than the thought of losing the family home or apartment. Almost everyone is on an emotional level 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 house if you go bankrupt? The solution is a resounding maybe. (not very helpful, 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 benefit 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 Melbourne 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 duty of the bankruptcy trustee is to firstly abide by 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 carried out in a bunch of various ways but it mainly comes down to income and assets. The trustees role is to collect payments over your income threshold. The further role is to sell off any assets that can contribute to fixing 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 pay back your debts. If there is no equity in your house then it's pointless to sell your home. This is happening increasingly since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not always reflect the price today.

A quick word of advice here if you have a house in Melbourne and are looking at Bankruptcy: get an expert to help you through this process, there are a number of variables in these scenarios that need 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 generating good money every month in interest out of you, month in month out, just as long as you keep up to date with your repayments then the bank desires you in there at all costs. Ultimately however it's not the bank's call if the trustee decides 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 quantity 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 suggestions or a real estate agents advice to get to this figure. When you get a valuer out to your property, make sure 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 give 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 life-like sell now figure.

There are two main reasons this valuation technique is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, and afterwards you can easily build your equity position. Second of all, your property may be worth much more than you thought. Get some guidance before carrying this out. The number of times I've seen clients that have sold their family home of 20 years simply to find out I could of helped them keep it; unfortunately this happens all too often

When it concerns Bankruptcy and houses, another major 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 doesn't, the equity is only factored on the 50 % of the property.

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

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