Bankruptcy Tamworth, What is the Deal with Debts?

Exactly what Debts are eliminated if I go Bankrupt?

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

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) and also any debts arising from uninsured Motor-vehicle claims and educational debts including HECS or FEE-HELP. These debts are not erased 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 attached 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 wiped out if you simply return 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 could be wiped but the asset needs to be sold or returned. This is just one aspect that, when it comes to Bankruptcy, it is important to get professional help - like that readily available at Bankruptcy Experts Tamworth.

What about my Tax Debts with the ATO can they be cleared away 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 get some advice because it is not always so simple. Feel free to call us right here at Bankruptcy Experts Tamworth if you have any questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsTamworth.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. Usually you may need to liquidate a company to deal with the debt that 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 Tamworth we specialise in business and personal debts so give us a call here at Bankruptcy Experts Tamworth if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsTamworth.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and difficult to understand. A question we normally get asked here over at Bankruptcy Experts Tamworth is 'what happens to my super if I declare Bankruptcy'? The reply for most is simple, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then nothing at all 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, consider the evolving number of members of Self-Managed Super Funds ("SMSFs") in the last few years; 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 to Bankruptcy?

Remember Bankruptcy Experts Tamworth is not indicating this article is the entire story, if you have any questions feel free to get in touch with us on 1300 795 575. Whether or not you call us or another person it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF indeed we advise you ask 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 taking into account 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 individual 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 the two of these members will need to also be the individual trustees. The job of trustee causes a lot of legal rules, and if you are in this role I would highly urge you to get aware of them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can notice how an individual bankruptcy can be very damaging 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 comes to pass 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 overall structure and make sure it is meeting the basic conditions, involving having a new trustee that is not dealing with issues with Bankruptcy. The Australian Tax office will supply you a 6 month 'grace period' to get this done before you face penalties. And consider, 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 constantly keeping the ATO informed of what is happening. This suggests you ought 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 must also notify ASIC of their resignation.

Through 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 Tamworth 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 be their duty 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 all of it 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 this you can notice how when it comes to Bankruptcy, even if one single member is running into issues, it can affect the very existence of an SMSF. If you are at this point facing this issue yourself, or with a partner in a SMSF, please seek financial advice to make certain you are satisfying the ATO requirements.

A simple solution ...

As I proposed earlier, a straightforward solution to your SMSF problem is to put your super back into a normal regulated managed fund prior to 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 possibilities further, give us a call at Bankruptcy Experts Tamworth or visit our website: www.bankruptcyexpertsTamworth.com.au or just give us a call on 1300 795 575.

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

Bankruptcy Tamworth is a challenging process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that practically nothing worries people more than the idea of losing the family home. Almost everybody is on an emotional level connected to their home - it's where the kids have grown, it's where you appreciate life on a day to day base.

Will you lose your home if you go bankrupt? The answer is a resounding maybe. (not very useful, I know) People generally feel that 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 Tamworth house, you ask? It's easier if I explain the basic theory behind the Bankruptcy process as administered by the trustee, then you'll have a clearer picture.

The duty of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very plain read about 600 pages if you are wondering).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is executed 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 other role is to sell any assets that can contribute to paying back your debts.

What this sounds like is that yes the trustee will sell your house right? Not normally. The only reason the trustee will sell any asset including your house is to get money to repay your debts. If there is no equity in your house then it's pointless to sell your home. This is happening much more since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not automatically reflect the price today.

A quick word of advice here if you have a house in Tamworth and are looking at Bankruptcy: get an expert to help you through this process, there are a lot of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they prefer to sell your house and not take the risk? The bank that has kindly lent you the money for your house is generating good money every month in interest out of you, month in month out, provided that you keep up to date with your payments then the bank really 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 mark the value of your house and the portion 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 provide you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to come to this figure. When you get a valuer out to your home, make sure 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 offer 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 your home in the next 30 days you may control the result. The idea is that you want a realistic sell now figure.

There are two main reasons this valuation process is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, and after that you can easily develop your equity position. The second thing is, your property may be really worth a lot more than you thought. Get some guidance before carrying this out. The number of times I've seen clients that have sold their family home of 20 years just to find out I could of helped them keep it; unfortunately this happens all too often

When it concerns Bankruptcy and houses, another major consideration is ownership, in many cases 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 does not, the equity is only factored on the 50 % of the property.

When it relates to Bankruptcy, this is just one of likely 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 portion of the house in bankruptcy also. I have to repeat this but get some help on this area of Bankruptcy because it is very tricky and every case is different.

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

Bankruptcy in Tamworth - Who do I speak to?

Should I consult with my accountant about Bankruptcy?

The answer seems clear doesn't it: if anyone knows your financial situation well in Tamworth, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant may not have your best interests at heart when it comes to Bankruptcy, it's that his skills lie in helping you save you money at tax time, minimizing your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on bankruptcy, it's generally done as a post graduate specialty program for those who wish to work in the field. Unless your accountant is an insolvency expert, he won't 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 Tamworth, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I consult my Solicitor about Bankruptcy?

No! You can speak to your solicitor in Tamworth but more than likely it won't do you much good. Solicitors are definitely good at undertaking things lawyers do, like assisting 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 Tamworth often tend to 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 like there are a small number 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 plenty of financial counselling services that can help you through this, they have no hidden agendas and they're an excellent option for letting you think through your situation when it comes to Bankruptcy. If you end up stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

There are also charitable organizations around Tamworth like Lifeline that offer a terrific service. They will be a sounding board if you just need somebody to talk about with you what your choices are. Don't let your financial trouble destroy your life - ultimately it's just money.

If you want to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Tamworth on 1300 795 575, or visit our website: www.bankruptcyexpertsTamworth.com.au.

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

When people in Tamworth come to me seeking to talk about Bankruptcy, they are usually loaded with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things clearer. One of the most general issues is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are an owner of a company any shape or size you can keep your business if you want to. In Tamworth, businesses that are insolvent have a few options just like liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complicated 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 Tamworth: 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 once you're bankrupt.

A limitation that applies when you are bankrupt as a business owner is that you may be in your very own business as a sole trader only. Certainly there are things you must disclose as a part 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 consequently you can no longer trade without that license, so make sure you are asking the ideal questions when it involves licenses and Bankruptcy in Tamworth.

However if your business is not impacted directly by such issues, then you'll will need 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 absolutely nothing had happened. There are laws in place to stop what is called phoenix companies growing out of the ashes of an old business.

Having said that, it's just a matter of talking to the correct people about Bankruptcy. Here in this circumstance you may believe you need a liquidator for your business, and you might be right, but bear in mind that every liquidator is unique 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 consider that giving generic advice in this area is possibly perilous as it can have very substantial implications for directors and business owners. This is due to the fact that it is one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some principles however, that you may benefit from. There is no limit to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your distributors 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 upset about what you can and can't do as a business owner, just get the appropriate advice ... If you need to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to consult Bankruptcy Experts Tamworth on 1300 795 575, or visit our website: bankruptcyexpertsTamworth.com.au.

Bankruptcy in Tamworth - Changes to aid Small Business and Entrepreneurs

Do you have an idea of just how much BankruptcyTamworth is changing? The Australian Government in late 2015 proposed some foundational changes to the Bankruptcy Laws in Australia. The most significant of these is the length of time that a person is bankrupt for. At this time, there is a minimum amount of time that you must remain bankrupt, however, this 3 year period may in fact be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be fairly important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 recommended that "the proposed changes to ease the burden of bankruptcy laws didn't go far enough and the government should adopt US-style laws to protect the family home".

These adjustments to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that guarding family assets was necessary because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws discouraged investors from supporting start-ups, and therefore mentoring had been "driven out of the system".

"They naturally find it very intimidating themselves personally and with their assets at risk in a risky early-stage deal, but with their own money in the deal and a lightened-up provision I think we 'd probably see more willingness. It could be more important than the money."

Fraudulent Behavior

The argument surrounding this Bankruptcy issue in Tamworth that some come up with is that this shift will only strengthen fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to misuse of the bankruptcy system. We have looked into the minimum, but on the other side of the issue, The government is not recommending to change the maximum term of 8 years if it deems a bankrupt has performed in an unethical or fraudulent way, and there are no propositions to change the repercussions of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As an insolvency professional in Tamworth, I have a fair share of experience when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Tamworth I have never struck someone abusing the system or acting in an immoral way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur suffer through the very challenging task of bankruptcy, not once have I believed they are happy about it. The standard small business owner or entrepreneur in Tamworth does not start out taking enormous financial risks with the intent to fail. The media really loves citing the apparent abuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

These proposed changes will be good for often the very best and brightest in Tamworth not get kicked out of the game financially for financial decisions often outside of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, employers keeping this country going.

Now there is a fine line with the things the government is trying to do here, since they are aiming to balance helping individuals who have made decisions out of their control, and preventing people from making errors that land them in trouble and therefore an issue of Bankruptcy. However you likewise don't want to get rid of the experience and knowledge that business owners have. You absolutely don't want to shatter people simply because they have had a sincere failure in a large or small start-up venture that has not worked out.

At the major end of town large well established companies have long been criticised for their failure to innovate - lets face it they would be more likely to do so if the risks of bankruptcy were lessened because directors are distressed they'll be personally accountable in an insolvency arrangement if the new endeavor doesn't work out.

The government's suggested 'safe haven' modifications for directors of companies will enable Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I cannot imagine, that these differences will be damaging to Australia's economy, in fact these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health field because the emotional cost of bankruptcy is substantial. When it comes to Bankruptcy in Tamworth not a day goes by where I don't find out the tragic stories of relationship failures, thoughts of suicide and the list continues.

Bankruptcy helps save lives, and it could save yours. If you need some assistance with your debts in Tamworth or are just thinking about Bankruptcy, feel free to contact us here at Bankruptcy Experts Tamworth on 1300 795 575, or visit our website: bankruptcyexpertstamworth.com.au

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

When it comes to Bankruptcy Tamworth, normally people aren't aware that there may be both voluntary, and involuntary bankruptcy - each have distinct methods and rules.

Involuntary bankruptcy happens when somebody you owe money to applies to the court to declare you bankrupt. Normally when you get one of those notices, you have actually 21 days to pay all the debt. If you don't, then the creditor returns to the court and requests the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documentation in and after that 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. Other than the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're overseen to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are likely to be made bankrupt by someone, get some advice 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 a person bankrupt you. Once you are bankrupt, it's generally too late.

Voluntary Bankruptcy

Nevertheless, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may have to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for every person of course, but commonly 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 spoke 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 remain on your file for 5 years, so for $30 you can have your credit file very 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 improper. The punishment doesn't seem to equate to 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 issue in trying to decide whether to enter into 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 contrast is that with a DA or PIA you pay back 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 part more people are afraid of when they come to me to review their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. Compared to countries like the United States, our bankruptcy laws are really reasonable.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. These days I suppose the government believes 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 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 pay for a car accident if the car was not insured.

There is much more that can be said about doing 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, bear in mind that there are always options when it concerns Bankruptcy in Tamworth, so do some investigation, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Experts Tamworth on 1300 795 575, or visit our website: bankruptcyexpertsTamworth.com.au.