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