Bankruptcy Brisbane, What is the Deal with Debts?

Which Debts are erased if I go Bankrupt?

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

But, simply put 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 such as HECS or FEE-HELP. These debts are not wiped out 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 actual security connected to it. So as an 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 eliminated 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 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 can be wiped but the asset has to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is necessary to get professional advice - like that available at Fresh Start Solutions Brisbane.

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 wiped out with bankruptcy. If you have a business with any form of debts get some advice because it is not always so self-explanatory. Feel free to call us here over at Fresh Start Solutions Brisbane if you have any type of questions on 1300 818 575. Or feel free to go to our website: www.freshstartsolutions.com.au/bankruptcy-Brisbane.com.au

What about my business or Company debts?

 Sometimes when it comes to Bankruptcy we can help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may have to liquidate a company to deal with the debt that way. And 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 Fresh Start Solutions Brisbane we specialise in business and personal debts so give us a call here at Fresh Start Solutions Brisbane if you have any questions regarding Bankruptcy on 1300 818 575. Or feel free to explore our website: www.freshstartsolutions.com.au/bankruptcy-Brisbane.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be involved and difficult to understand. A question we usually get asked here at Fresh Start Solutions Brisbane is 'what happens to my super if I declare Bankruptcy'? The answer for most is easy, if your super is normally 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, look at the developing number of members of Self-Managed Super Funds ("SMSFs") lately; the ATO tells us it has increased 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 Fresh Start Solutions Brisbane is not proposing this short article is the entire story, if you have any questions feel free to consult with us on 1300 818 575. No matter if you call us or somebody else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we highly recommend you ask for both legal and financial advice before proceeding with any of the actions proposed in this article.

What is a Disqualified Person?

First and foremost, if you are thinking about Bankruptcy, you can not be a part of a SMSF. Why? Because if you are facing bankruptcy, you will be categorized as a 'disqualified person'. And a disqualified person 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 will need to also be the individual trustees. The role of trustee causes a lot of legal rules, and if you are in this role I would highly urge you to become 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 very 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 takes place if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will have to be restructured. This means that you will want to consider your complete structure and ensure that it is meeting the basic conditions, involving having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the very 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 indicates you need 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 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.

During 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 Fresh Start Solutions Brisbane for some free advice on 1300 818 575.

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 end up being 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 want to decide if they would like to remain as a single member SMSF, or if they want to roll everything into a managed fund. If both members are entering bankruptcy, then they would definitely need to sell all assets at once and move the liquid assets to the managed fund.

From that 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 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 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 headaches outlined above. Bankruptcy is never easy, but finding proper advice is the best initial step. If you want to discuss your options further, contact us at Fresh Start Solutions Brisbane or visit our website: www.freshstartsolutions.com.au/bankruptcy-Brisbane.com.au or just call us on 1300 818 575.

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

Bankruptcy Brisbane is a complicated process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that nothing at all troubles people more than the thought of losing the family home. Almost everyone is emotionally 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 helpful, I know) People generally feel it's an inevitable consequence and a part of Bankruptcy, and consequently 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 advantage of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've accepted to pay back the debt you are in.

So how is it possible to keep my Brisbane 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 responsibility of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very plain read about 600 pages if you are intrigued).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is done in a bunch of different 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 your debts.

What this seems 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 pay back your debts. If there is no equity on your property 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 necessarily reflect the price today.

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

You might wonder, why would the bank want bankrupt customers? wouldn't they hope to sell your house and not take the risk? The bank that has kindly lent you the money for your house is creating good money every month in interest out of you, month in month out, just as long as you keep up to date with your monthly payments then the bank wants you in there at all costs. Essentially however it's not the bank's call if the trustee establishes 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 write 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 offer you peace of mind, don't use your neighbours' gut feel advice or a real estate agents advice to arrive at this figure. When you get a valuer out to your house, see to it 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 let them know you need to sell the house in the next 30 days you may control the result. The idea is that you want a realistic sell now figure.

There are two 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 create your equity position. Second of all, your home may be worth even more than you thought. Get some guidance before doing this. The number of times I've met with 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 comes to Bankruptcy and houses, another serious consideration is ownership, often houses are acquired 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 involves Bankruptcy, this is just one of probably numerous scenarios that are possible when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the property in bankruptcy also. I have to repeat this but get some advice on this area of Bankruptcy because it is very tricky 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 speak to Fresh Start Solutions Brisbane on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Brisbane

Bankruptcy in Brisbane - Who exactly do I speak to?

Should I get in touch with my accountant about Bankruptcy?

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

Most accounting degrees will put in very little to no time on insolvency, it's generally performed as a post graduate speciality program for those who want 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 guarantee you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Brisbane, they have the tendency to be large firms with very nice office spaces who charge accordingly.

Should I talk with my Solicitor about Bankruptcy?

No! You can talk to your solicitor in Brisbane but more than likely it won't do you much good. Solicitors are definitely good at doing things lawyers do, like helping you do your Will and buying your house and trying to keep you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Brisbane generally have either a legal or accounting experience, and the main reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just as there are a couple of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay a sizable price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services that can help you through this, they have no hidden agendas and they're a superb option for helping you analyze your situation when it comes to Bankruptcy. If you find yourself stressing out constantly, not sleeping, not eating or over-eating and thinking of money pressures continuously, then get some help.

There are also charitable organizations around Brisbane like Lifeline that offer a fantastic 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 like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Brisbane on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Brisbane

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

When people in Brisbane come to me trying to discuss Bankruptcy, they are constantly full of questions. The internet has lots of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it more clear. One of the most simple concerns is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are a manager of a company any shape or size you can maintain your business if you want to. In Brisbane, businesses that become insolvent have a few options for example, liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complicated area so get some professional advice on this if you have a business. Generally speaking, the financial obligations in a business and personal debts go hand in hand when a business owner goes bankrupt. There are several essential implications for directors of companies when it pertains to Bankruptcy in Brisbane: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to 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 may be in your very own business as a sole trader only. There are things you will need to make known as a part of that but ultimately you can still run your company. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. For instance, if you run a building company, your license will be suspended once you're bankrupt and therefore you can not trade without that license, so make sure you are asking the ideal questions when it involves licenses and Bankruptcy in Brisbane.

However if your business is not impacted directly by such issues, then you'll have 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 not a thing had happened. There are laws in place to stop what is called phoenix companies popping up out of the ashes of an old business.

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

When it comes to Bankruptcy, I believe that giving generic advice in this area is essentially damaging as it can have very major implications for directors and business owners. This is because it is just one of those cases where what the right guidance for one business owner is the inappropriate advice for the other. There are some basics 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 suppliers 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 overly stressed about what you can and can't do as a business owner, just get the appropriate advice ... If you want to learn more about what to do, precisely where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Fresh Start Solutions Brisbane on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Brisbane

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

When it comes to Bankruptcy Brisbane, generally people aren't aware that there can be both voluntary, and involuntary bankruptcy - both have different methods and rules.

Involuntary bankruptcy arises when a person you owe money to applies to the court to declare you bankrupt. Generally when you get one of these particular notices, you have 21 days to pay all the debt. If you don't, then the creditor goes back to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documents in and after that you are bankrupt.

You can contest a bankruptcy notice by going to court immediately after 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 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 and anxiety, torment and fear that accompanies this method is incredible. If you think you are prone to be made bankrupt by someone, get some guidance and act on that advice. Generally I've found it's always more effective to know what you can and can't do before you have somebody bankrupt you. Once you are bankrupt, it's usually too late.

Voluntary Bankruptcy

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

This question is not the very same for every 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 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 help you think this through. If you move house and forget to pay your $30 phone bill for 6 months more, it's very likely the phone company will default your credit file. That default will remain 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 affect 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 actually have defaults on your credit report for 5 years, remember 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 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 repay the money and nevertheless 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 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 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. Nowadays 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 costs the taxpayer anyway.

Bankruptcy wipes every one 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 take care of a car accident if the car was not insured.

There is a lot more that can be said about this and Bankruptcy in general but the purpose of this blog was to help you decide between a few readily available options. When getting some advice, remember that there are always choices when it concerns Bankruptcy in Brisbane, so do some investigation, and Good luck!

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 contact Fresh Start Solutions Brisbane on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Brisbane

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

Bankruptcy Brisbane is a complex process, and you need 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 limit on how much you can earn. However, I will say that your income is a serious 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 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 sum 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 request a hardship variation that increases the threshold amount, if you have financial commitments in Brisbane such as medical, child care, substantial travel to and from your job, or a situation where your spouse used to work but is not able to add to the family income.

Some of the interesting parts of Bankruptcy is that your employer will not be told 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 amended net income limit will be $55,332.10.

There are much more issues involving income and what is or isn't regarded as income - if you're not sure, it's a good idea to get skilled advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances 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 whilst you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund just as long as that doesn't take you over your threshold income limitations.

If you believe that when it comes to Bankruptcy, your situation is more complex, then just get qualified advice in Brisbane. I may seem like a broken record, but keep in mind that it's always a great idea to work through these options prior to declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.

If you would like to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Brisbane on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Brisbane