Bankruptcy Wollongong, So what is the Deal with Debts?

Exactly what Debts are erased if I go Bankrupt?

The quick answer is that when it concerns Bankruptcy most debts are wiped, and I have included 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 for example, HECS or FEE-HELP. These debts are not removed when you file for bankruptcy.

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some real security linked to it. So for instance 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 cleared away if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt erased 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 facet that, when it comes to Bankruptcy, it is important to get professional guidance - like that provided at Bankruptcy Experts Wollongong.

What about my Tax Debts with the ATO can they be eliminated 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 sort of debts get some advice because it is not always so easy. Feel free to call us right here over at Bankruptcy Experts Wollongong if you have any type of questions on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsWollongong.com.au

What about my business or Company debts?

Sometimes when it concerns Bankruptcy we can aid you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Typically you may need to liquidate a company to deal with the debt this way. 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 Wollongong we specialise in business and personal debts so contact us here at Bankruptcy Experts Wollongong if you have any questions about Bankruptcy on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsWollongong.com.au

Bankruptcy, Will I lose my Superannuation?

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

What if I have a Self Managed Super Fund?

This is a growing concern, look into the developing 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 involves Bankruptcy?

Remember Bankruptcy Experts Wollongong is not suggesting this article is the entire story, if you have any questions feel free to call us on 1300 795 575. Whether you call us or somebody else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we strongly recommend you look for 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 thinking about Bankruptcy, you can not be a part of a SMSF. Why? Because if you are taking on bankruptcy, you will be categorized as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means each of these members must also be the individual trustees. The duty of trustee poses a lot of legal rules, and if you are in this position I would highly recommend you to be 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 quite damaging to a SMSF and as you can imagine 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 comes about 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 have 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 supply you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the most suitable 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 continuously keeping the ATO informed of what is happening. This means you will need to let them know that you have a bankruptcy issue 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 will 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 Bankruptcy Experts Wollongong for some free advice on 1300 795 575.

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 need to resign and the other member will clear 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 want to roll everything into a managed fund. If both members are entering bankruptcy, then they would definitely 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 though one single member is dealing with issues, it can affect the very existence of an SMSF. If you are right now facing this problem yourself, or with a partner in a SMSF, please seek financial advice to make certain you are meeting the ATO requirements.

A simple solution ...

As I proposed earlier, a simple solution to your SMSF issue 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 receiving proper advice is the best 1st step. If you want to discuss your options further, call us at Bankruptcy Experts Wollongong or visit our website: www.bankruptcyexpertsWollongong.com.au or just call us on 1300 795 575.

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

Bankruptcy Wollongong is a complicated process, but I know from meeting with thousands facing the chance of bankruptcy over the years, that nothing at all worries people more than the idea of losing the family house. Almost every person is on an emotional level connected to their home - it's where the children have grown, it's where you enjoy life on a day to day base.

Will you lose your home if you go bankrupt? The answer is a resounding maybe. (not very helpful, I know) People typically feel that it's an inevitable consequence and a part of Bankruptcy, and hence 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 perk 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 Wollongong house, you ask? It's easier if I explain the basic concept behind the Bankruptcy process as administered by the trustee, then you'll have a clearer image.

The duty 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 interested).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is done in a bunch of diverse ways but it mainly comes down to income and assets. The trustees role is to collect payments over and above your income threshold. The other role is to sell off any assets that can contribute to repaying 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 much more since the GFC as house prices in many areas 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 Wollongong and are looking at Bankruptcy: get a skilled professional to help you through this process, there are plenty of variables in these scenarios that should be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they want 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, as long as you keep up to date with your fees then the bank desires you in there at all costs. Essentially however it's not the bank's call if the trustee determines that there is plenty 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 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 give you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to reach this figure. When you get a valuer out to your property, make certain 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 provide two valuations: one for a quick sale and one for a well marketed non time delicate sale. Nowadays that's not the case, but if you meet them and let them know you need to sell your home in the next 30 days you may sway the result. The idea is that you want a sound sell now figure.

There are two main reasons this valuation system is critical to you: one you will likely have peace of mind ascertaining the market value of your house, then afterwards you can easily create your equity position. Second of all, your property may be worth even more than you thought. Get some advice before doing this. The number of times I've seen 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, often houses are bought in joint names. Simply put 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 to Bankruptcy, this is just one of potentially 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 home in bankruptcy also. I need to repeat this but get some help on this area of Bankruptcy because it is very tricky and every single case is different.

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

Bankruptcy in Wollongong - Who exactly do I talk to?

Should I talk to my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anybody knows your financial situation well in Wollongong, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant may not have your best interests in mind when it comes to Bankruptcy, it's that his know-how lie in helping you save you money at tax time, lowering your tax liability and lodging your BAS.

Most accounting degrees will spend hardly any to no time on insolvency, it's generally performed as a post graduate speciality program for those who wish to work in the field. Unless your accountant is an insolvency specialist, he will not know that a lot about the effects of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Wollongong, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I talk to my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Wollongong but more than likely it won't do you much good. Solicitors are certainly good at carrying out 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 comes to Bankruptcy, the specialists in Wollongong often tend to have either a legal or accounting qualifications, and the reason for that is simply that you can't enrol 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 choose one you will pay an ample price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services to aid you with this, they have no hidden agendas and they're a remarkable option for really helping you analyze your situation when it comes to Bankruptcy. If you are stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures all the time, then get some help.

There are also charities around Wollongong like Lifeline that offer a terrific service. They will be a sounding board if you just need a person to discuss with you what your possibilities are. Don't let your financial issue destroy your life - in the end it's just money.

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

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

When people in Wollongong come to me planning to talk about Bankruptcy, they are typically packed with questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make it more clear. One of the very most routine problems is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are an owner of a business any shape or size you can keep your business if you wish to. In Wollongong, businesses that end up being insolvent have a few options just like liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complex area so get some experienced advice on this one if you have a business. Generally speaking, the financial obligations in a business and personal debts go hand in hand when a business owner declares bankruptcy. There are some important implications for directors of companies when it pertains to Bankruptcy in Wollongong: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to retire as a director once you're bankrupt.

A limitation that applies when you are actually bankrupt as a business owner is that you can be in your own business as a sole trader only. There are things you should disclose as an aspect of that but basically 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 no longer trade without that license, so make sure you are asking the right questions when it comes to licenses and Bankruptcy in Wollongong.

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 company, then go bankrupt and then open the doors the next day like practically nothing had happened. There are laws in place to stop what is called phoenix companies appearing out of the ashes of an old company.

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

When it comes to Bankruptcy, I think that giving generic advice in this area is potentially unsafe as it can have very significant implications for directors and business owners. This is due to the fact that it is one of those cases where what the right guidance for one business owner is the incorrect advice for the other. There are some fundamentals however, that you may benefit from. There is no reduce to the size of the business you run even though you are bankrupt. You can employ staff. You can constantly deal with your distributors under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the appropriate advice ... If you would like to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Experts Wollongong on 1300 795 575, or visit our website:.bankruptcyexpertsWollongong.com.au.

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

When it comes to Bankruptcy Wollongong, often people aren't aware that there may be both voluntary, and involuntary bankruptcy - each have different approaches and policies.

Involuntary bankruptcy takes place when somebody you owe money to involves the court to declare you bankrupt. Commonly when you get one of these kinds of notices, you have 21 days to pay all the debt. If you do not, then the creditor returns to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documentation in and afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from 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 managed to in the very same way.

However, when it comes to Bankruptcy for this, the stress and anxiety, torment and fear that accompanies this method is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some guidance and act on that advice. Generally I've found it's always much better to know what you can and can't do before you have an individual bankrupt you. Once you are bankrupt, it's normally far too late.

Voluntary Bankruptcy

However, 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 same for each person of course, but generally I find that one way you could work it out is to figure out how long it will take you to pay all of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may assist 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 fail to remember to pay your $30 phone bill for 6 months more, it's very likely the phone service will default your credit file. That default will sit 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 have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unscrupulous. The punishment doesn't seem to equate to the crime in my book. So if you already have defaults on your credit report for 5 years, keep in mind that bankruptcy is on your credit file for a total 7 years then its wiped off completely.

So if your credit rating is a big factor in trying to decide whether to take part 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 variation is that with a DA or PIA you repay the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part 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 provisions 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 extremely good.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government finds that 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 in turn costs the taxpayer anyway.

Bankruptcy wipes all 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 pay for a car accident if the car was not insured.

There is far 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 available options. When getting some advice, keep in mind that there are always possibilities when it comes to Bankruptcy in Wollongong, so do some study, and Good luck!

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Wollongong on 1300 795 575, or visit our website:bankruptcyexpertsWollongong.com.au.

Bankruptcy in Wollongong - Will my income be changed if I go bankrupt?

Bankruptcy Wollongong is a complex process, and you should 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 need to know about going bankrupt is there is no rule on how much you can earn. However, I will mention that your income is a considerable consideration when working through when it comes to Bankruptcy.

The first thing you need to learn about this area of Bankruptcy is just 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 quantity you earn per year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can get a hardship variation that increases the threshold amount, if you have financial strains in Wollongong like medical, child care, major travel to and from your job, or a circumstance where your partner used to work but is no longer able to support the household income.

Some of the useful parts of Bankruptcy is that your employer will not be alerted when you file for bankruptcy. Also, Child support is always looked at 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 provide $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

There are much more issues involving income and what is or isn't considered income - if you're not sure, it's a good idea to get professional advice. The reason you will need to consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund may be taken by the ATO whilst you are bankrupt to add toward your tax bill. If you don't have a tax bill then you will keep your tax refund so long as that doesn't take you over your threshold income limits.

If you feel like when it comes to Bankruptcy, your situation is more challenging, then just get experienced advice in Wollongong. I may seem like a broken record, but remember 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 find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Wollongong on 1300 795 575, or visit our website: bankruptcyexpertsWollongong.com.au.