Losing your house: Just how much do you understand about Bankruptcy in Australia?

The greatest question a lot of people have when they come to our business regarding Bankruptcy is simply 'Can I manage to keep my house?' and sometimes the truth is yes, you can keep your house.

The only reason you are going to be driven to sell your family home when you file for bankruptcy is due to the fact that you have a great deal of equity in the home that it is deemed an asset. Please check out these straightforward hypothetical case studies below to get your head around Bankruptcy and how it affects houses in Australia. Remember If you have to know more about Bankruptcy and houses feel free to get in touch with us here at Bankruptcy Australia on 1300 795 575, or go to our website: www.bankruptcyexpertsAustralia.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue bought a house in a mining town for $450,000. At this time the mining boom was keeping all the property prices nice and high. Now they are needing to look at Bankruptcy given that they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really wish to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their home is currently only worth $450,000 after all these years, to make sure they searched www.realestate.com.au/ sold section of the website to see what other homes in the streets nearby have sold for recently.

Having said that they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.

Current Mortgage Value = $450,000.

Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their house when they go bankrupt, as long as they keep up the mortgage payments then all will be well for these people for the 3 years they are in bankruptcy.

At the end of the bankruptcy period of time the trustee will write to them and ask if they want to take over ownership of their house again and as long as it has not grown in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is usually somewhere between $3,000 and $5,000 to cover the legal costs of modifying the land title deed etc.

Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle bought a townhouse in a nice suburb of Australia for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.

Current Mortgage Value = $800,000.

Net Equity Value = $100,000.

As a result of a recent business failing Bill is about $240,000 in debt. Michelle who works in banking has a separate job and no other debt aside from the mortgage. Bill cannot pay his debts therefore he is reviewing Bankruptcy. Michelle is bothered that she too may need to declare bankruptcy or be forced into it due to the house loan.

Within this particular case the trustee is required to access or get their hands on Bill's half of the equity which is $50,000 less selling costs. They can do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely in this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may be capable to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and demanding, these two case studies above are just the tip of the iceberg as far as your options in Australia are concerned. If you need to know more about Bankruptcy and houses feel free to call us here at Bankruptcy Australia on 1300 795 575, or head to our website: www.bankruptcy-australia.net.au

Losing your house: Just how much do you know of Bankruptcy in Sydney?

The most important concern a lot of people have when they come to us regarding Bankruptcy is generally 'Can I manage to keep my house?' and in some cases the truth is yes, you can keep your house.

The only reason you can be obliged to sell your family home when you file for bankruptcy is due to the fact that you have a lot of equity in the home that it is considered an asset. Please read through these straightforward hypothetical case studies below to get your head around Bankruptcy and how it impacts houses in Australia. Remember If you need to know more about Bankruptcy and houses feel free to consult with us here at Bankruptcy Advice Sydney on 1300 879 867, or check out our website: www.bankruptcy-advice.com.au/Sydney.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was helping keep all the property prices nice and high. Now they are needing to look at Bankruptcy because they have substantial debts of $80,000 on top of their mortgage and credit card and tax debt.

They really wish to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their house is currently only worth $450,000 after all these years, to be sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets nearby have sold for fairly recently.

Having said that they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.

Current Mortgage Value = $450,000.

Net Equity Value = $0.

Because there is no equity in this property the trustee will not ask Mike and Sue to sell their property when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period of time the trustee will write to them and ask if they would like to take over ownership of their house again and so long as it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is typically somewhere between $3,000 and $5,000 to cover the legal costs of altering the land title deed etc.

Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a lovely suburb of Sydney for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.

Current Mortgage Value = $800,000.

Net Equity Value = $100,000.

Due to a recent business failure Bill is about $240,000 in debt. Michelle who works in banking has a separate job and no other debt aside from the mortgage. Bill cannot pay his debts so he is looking at Bankruptcy. Michelle is bothered that she too may need to file for bankruptcy or be forced into it because of the house loan.

In this particular case the trustee is required to access or get their hands on Bill's half of the equity which is $50,000 less selling costs. They might do this in a few ways; 1. Make them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very improbable with this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may be able to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and complicated, these two case studies above are just the tip of the iceberg as far as your options in Sydney are concerned. If you need to know more about Bankruptcy and houses feel free to consult with us here at Bankruptcy Advice Sydney on 1300 879 867, or head to our website: www.bankruptcy-advice.com.au/Sydney.com.au.

Losing your house: How much do you know of Bankruptcy in Sunshine Coast?

The primary concern people have when they come to us regarding Bankruptcy is normally 'Can I manage to keep my house?' and in many cases the answer is yes, you can manage to keep your house.

The only reason you will likely be required to sell your family home if you file for bankruptcy is actually due to the fact that you have a great deal of equity in the home that it is considered an asset. Please go over these straightforward hypothetical case studies below to get your head around Bankruptcy and how it affects houses in Australia. Remember If you want to know more about Bankruptcy and houses feel free to call us here at Bankruptcy Advice Sunshine Coast on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/SunshineCoast.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was keeping all the property prices nice and high. Now they are needing to look at Bankruptcy considering they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their home is still only worth $450,000 after all these years, to be sure they searched www.realestate.com.au/ sold section of the website to see what other homes in the streets close by have sold for lately.

However they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.

Current Mortgage Value = $450,000.

Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their home when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy time period the trustee will write to them and ask if they want to take over ownership of their house again and as long as it has not grown in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is normally somewhere between $3,000 and $5,000 to cover the legal costs of changing the land title deed etc.

Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle bought a townhouse in a great suburb of Sunshine Coast for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.

Current Mortgage Value = $800,000.

Net Equity Value = $100,000.

Because of a recent business problem Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt aside from the mortgage. Bill cannot pay his debts so he is looking into Bankruptcy. Michelle is worried that she too may need to declare bankruptcy or be compelled into it due to the house loan.

With this particular case the trustee is required to access or get their hands on Bill's part of the equity which is $50,000 less selling costs. They might do this in a few ways; 1. Make them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very improbable with this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the chance to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is confusing and complicated, these two case studies above are just the tip of the iceberg as far as your options in Sunshine Coast are concerned. If you need to know more about Bankruptcy and houses feel free to consult with us here at Bankruptcy Advice Sunshine Coast on 1300 879 867, or check out our website: www.bankruptcy-advice.com.au/SunshineCoast.au.

Losing your house: How much do you know of Bankruptcy in Sunshine Coast?

 The greatest question a lot of people have when they come to us regarding Bankruptcy is certainly 'Can I keep my house?' and sometimes the truth is yes, you can manage to keep your house.

The only reason you will likely be compelled to sell your family home if you declare bankruptcy is due to the fact that you have a lot of equity in the home that it is deemed an asset. Please check out these straightforward hypothetical case studies below to get your head around Bankruptcy and how it has an effect on houses in Australia. Remember If you need to know more regarding Bankruptcy and houses feel free to call us here at Bankruptcy Experts Sunshine Coast on 1300 795 575, or visit our website: www.bankruptcyexpertsSunshineCoast.com.au

Case Study 1. (Mike & Sue Smith)

5 years ago Mike and Sue bought a house in a mining town for $450,000. At this time the mining boom was keeping all the property prices nice and high. Now they are needing to look at Bankruptcy because they have substantial debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their house is still only worth $450,000 after all these years, to make sure they searched www.realestate.com.au/ sold section of the website to see what other homes in the streets close by have sold for recently.

However they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.

Current Mortgage Value = $450,000.

Net Equity Value = $0.

Because there is no equity in this property the trustee will not ask Mike and Sue to sell their property when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period the trustee will write to them and ask if they would like to take over ownership of their house again and as long as it has not grown in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is typically somewhere between $3,000 and $5,000 to cover the legal costs of modifying the land title deed etc.

Now let's take a look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson)

2 years ago Bill and Michelle purchased a townhouse in a lovely suburb of Sunshine Coast for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.

Current Mortgage Value = $800,000.

Net Equity Value = $100,000.

Because of a recent business failure Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt except for the mortgage. Bill cannot pay his debts and so he is looking into Bankruptcy. Michelle is bothered that she too may need to declare bankruptcy or be driven into it because of the house loan.

Within this particular case the trustee is required to access or get their hands on Bill's part of the equity which is $50,000 less selling costs. They may do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely in this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may be able to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and complicated, these two case studies above are just the tip of the iceberg as far as your options in Sunshine Coast are concerned. If you need to know more about Bankruptcy and houses feel free to consult with us here at Bankruptcy Experts Sunshine Coast on 1300 795 575, or head to our website: freshstartsolutions.com.au/bankruptcy-sunshinecoast

Losing your house: How much do you know of Bankruptcy in Australia?

The primary concern people have when they come to our company about Bankruptcy is simply 'Can I keep my house?' and in some cases the truth is yes, you can manage to keep your house.

The only reason you will likely be required to sell your family home when you file for bankruptcy is due to the fact that you have a great deal of equity in the house that it is regarded as an asset. Please go through these simple hypothetical case studies below to get your head around Bankruptcy and how it impacts houses in Australia. Remember If you have to know more regarding Bankruptcy and houses feel free to get in touch with us here at Fresh Start Solutions Australia on 1300 818 575, or head to our website: www.freshstartsolutions.com.au/bankruptcy-Australia.com.au

Case Study 1. (Mike & Sue Smith)

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was keeping all the property prices nice and high. Now they are needing to look at Bankruptcy because they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their home is currently only worth $450,000 after all these years, to be sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets close by have sold for fairly recently.

Having said that they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

Current House Value = $450,000.

Current Mortgage Value = $450,000.

Net Equity Value = $0.

Because there is no equity in this property the trustee will not ask Mike and Sue to sell their home when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period of time the trustee will write to them and ask if they want to take over ownership of their house again and provided that it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is usually somewhere between $3,000 and $5,000 to cover the legal costs of altering the land title deed etc.

Now let's take a look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a nice suburb of Australia for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

Current House Value = $900,000.

Current Mortgage Value = $800,000.

Net Equity Value = $100,000.

As a result of a recent business failing Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt aside from the mortgage. Bill cannot pay his debts and so he is taking a look at Bankruptcy. Michelle is concerned that she too may need to declare bankruptcy or be compelled into it because of the house loan.

With this particular case the trustee is required to access or get their hands on Bill's half of the equity which is $50,000 less selling costs. They might do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very unlikely with this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the chance to purchase Bill's share of the equity by coming up with $50,000 and buying out Bills' half and from that moment its now 100 % Michelle's house.

Property and Bankruptcy in Australia is challenging and demanding, these two case studies above are just the tip of the iceberg as far as your options in Australia are concerned. 

If you need to know more about Bankruptcy and houses feel free to call us here at Fresh Start Solutions Australia on 1300 818 575, or go to our website: www.freshstartsolutions.com.au/bankruptcy-Australia.com.au.

Bankruptcy Sunshine Coast, Just what is the Deal with Debts?

Precisely what Debts are wiped out if I go Bankrupt?

The straightforward answer is that when it comes to Bankruptcy most debts are wiped, and I have included a chart below for you to look at.

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) as well as any debts arising from uninsured Motor-vehicle claims and educational debts for instance, HECS or FEE-HELP. These debts are not cleared away 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 absolute security linked 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 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 can be wiped but the asset needs to be sold or returned. This is just one element that, when it comes to Bankruptcy, it is necessary to get professional guidance - like that readily available at Bankruptcy Advice Sunshine Coast.

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 eliminated with bankruptcy. If you have a business with any sort of debts receive some advice because it is not always so simple. Feel free to call us here over at Bankruptcy Advice Sunshine Coast if you have any type of questions on 1300 879 867. Or feel free to visit our website: www.bankruptcy-advice.com.au/SunshineCoast.au

What about my business or Company debts?

In some cases when it involves 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 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 Advice Sunshine Coast we specialise in business and personal debts so call us here at Bankruptcy Advice Sunshine Coast if you have any questions about Bankruptcy on 1300 879 867. Or feel free to check out our website: www.bankruptcy-advice.com.au/SunshineCoast.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy Australia can be involved and confusing. A question we often get asked here over at Bankruptcy Australia is 'what happens to my super if I apply for Bankruptcy'? The reply for most is easy, if your super is normally in a regulated fund or industry fund like Sunsuper or Host Plus then virtually nothing happens; your super is 100 % safe when it comes down to Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, take into account the increasing 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 concerns Bankruptcy?

Remember Bankruptcy Australia is not indicating this article is the complete story, if you have any questions feel free to contact us on 1300 795 575. No matter if you call us or another person it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we strongly recommend you obtain both legal and financial advice before proceeding with any of the actions suggested in this article.

 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 going up against bankruptcy, you will be classified as a 'disqualified person'. And a disqualified person 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 both of these members have to 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 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 see how an individual bankruptcy can be very damaging to a SMSF and as you can assume 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 happens 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 extensive structure and ensure that it is meeting the basic conditions, including having a new trustee that is not experiencing 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 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 constantly keeping the ATO informed of what is happening. This indicates you need 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 have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they must 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 uncertain call Bankruptcy Australia 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 end up being their obligation 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 have to decide if they want to remain as a single member SMSF, or if they need to roll it all 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 that you can notice how when it comes to Bankruptcy, even when one single member is facing issues, it can affect the very existence of an SMSF. If you are already facing this concern 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 proposed earlier, a basic solution to your SMSF situation 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 finding proper advice is the best first step. If you want to discuss your options further, give us a call at Bankruptcy Australia or visit our website: www.bankruptcy-australia.net.au.au or just give us a call on 1300 795 575.