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.

Bankruptcy, Will I lose my Superannuation?

Bankruptcy Australia can be complicated and perplexing. A question we often get asked here over at Bankruptcy Advice Sunshine Coast is 'what happens to my super if I apply for Bankruptcy'? The reply for most is straightforward, if your super is usually in a regulated fund or industry fund like Sunsuper or Host Plus then 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 account the growing number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has grown 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 Advice Sunshine Coast is not proposing this short article is the whole story, if you have any questions feel free to consult with us on 1300 879 867. Whether you call us or someone else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we highly recommend you obtain both legal and financial advice before proceeding with any of the actions proposed ina 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 labeled 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 the two of these members have to also be the individual trustees. The role of trustee sets a lot of legal rules, and if you are in this position I would highly encourage you to be aware of 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 rather harmful 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 takes effect 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 over-all structure and make certain it is meeting the basic conditions, including having a new trustee that is not experiencing issues with Bankruptcy. The Australian Tax office will provide you a 6 month 'grace period' to get this done before you face penalties. And consider, sometimes the most effective 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 frequently 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 the course of 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 Advice Sunshine Coast for some free advice on 1300 879 867.

What if I use a single member fund?

If you are a single member fund, then you will need to appoint a new director, and it will then become their responsibility to oversee the sale and transfer of assets into a managed fund. If there are two or more members, than the bankrupt member will have to resign and the other member will take away the property and halve the proceeds. They would then need to decide if they wish to remain as a single member SMSF, or if they want to roll it all into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets immediately and move the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even if one single member is dealing with issues, it can affect the very existence of an SMSF. If you are right now facing this trouble yourself, or with a partner in a SMSF, please seek financial advice to make sure you are meeting the ATO requirements.

A simple solution ...

As I recommended earlier, a straightforward solution to your SMSF issue 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 receiving proper advice is the best first step. If you want to discuss your possibilities further, contact us at Bankruptcy Advice Sunshine Coast or visit our website: www.bankruptcy-advice.com.au/SunshineCoast.au or just give us a call on 1300 879 867.

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

Bankruptcy Sunshine Coast is a tricky process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that not a thing concerns people more than the idea of losing the family home or apartment. Almost every person is psychologically connected to their home - it's where the kids have grown up, it's where you take pleasure in life on a day to day base.

Will you lose your home if you go bankrupt? The reply is a resounding maybe. (not very useful, I know) People generally assume it's an inevitable consequence and a part of Bankruptcy, and therefore 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 agreed to pay back the debt you are in.

So how is it possible to keep my Sunshine Coast house, you ask? It's easier if I explain the basic idea behind the Bankruptcy process as administered by the trustee, then you'll have a more clear image.

The function 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 eager).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is done 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 paying your debts.

What this seems like is that yes the trustee will sell your house right? Not necessarily. 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 always reflect the price today.

A quick tip here if you have a house in Sunshine Coast and are looking at Bankruptcy: get an expert to help you through this process, there are plenty of variables in these scenarios that have to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they like to sell your house and not take the risk? The bank that has generously 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 payments then the bank desires you in there at all costs. Ultimately however it's not the bank's call if the trustee figures out that there is lots 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 write down the value of your house and the amount 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 recommendations or a real estate agents advice to get to this figure. When you get a valuer out to your house, ensure you tell the valuer to value the property for a quick sale, make certain 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 practical sell now figure.

There are two main reasons this valuation process is critical to you: one you can have peace of mind ascertaining the market value of your house, and afterwards you can easily create your equity position. Secondly, your house may be really worth even more than you thought. Get some tips before doing this. The number of times I've met with clients that have sold their family home of 20 years just to learn I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another main consideration is ownership, in most cases houses are bought 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 doesn't, 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 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 assistance on this area of Bankruptcy because it is very tricky and every single 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 speak to Bankruptcy Advice Sunshine Coast on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/SunshineCoast.