Bankruptcy Gladstone, So what is the Deal with Debts?

Precisely what Debts are cleared away if I go Bankrupt?

The simple 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) together with any debts arising from uninsured Motor-vehicle claims and educational debts for instance, HECS or FEE-HELP. These debts are not erased 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 definite security connected to it. So for 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 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 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 essential to get professional assistance - like that provided at Bankruptcy Experts Gladstone.

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 wiped out with bankruptcy. If you have a business with any form of debts find some advice because it is not always so easy. Feel free to call us here over at Bankruptcy Experts Gladstone if you have any type of questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsGladstone.com.au

What about my business or Company debts?

Sometimes when it involves Bankruptcy we can really help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may have to liquidate a company to deal with the debt that way. When it comes to Bankruptcy, it can be a confusing area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Experts Gladstone we specialise in business and personal debts so give us a call here at Bankruptcy Experts Gladstone if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsGladstone.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be involved and difficult to understand. A question we usually get asked here at Bankruptcy Experts Gladstone is 'what happens to my super if I declare Bankruptcy'? The solution for most is simple, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then very little 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, take into account the evolving number of members of Self-Managed Super Funds ("SMSFs") in recent 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 Experts Gladstone is not indicating this post is the complete story, if you have any questions feel free to get in touch with 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 advise you find 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 facing bankruptcy, you will be categorized 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 will need to also be the individual trustees. The job of trustee presents a lot of legal rules, and if you are in this position I would highly encourage you to get knowledgeable about them all-- for example 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 quite detrimental to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have so as to restructure my SMSF Fund after I'm bankrupt?

So what transpires 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 complete structure and ensure 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 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 continuously keeping the ATO informed of what is happening. This indicates you ought 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 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 not exactly sure call Bankruptcy Experts Gladstone 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 responsibility to oversee the sale and relocation of assets into a managed fund. If there are two or more members, than the bankrupt member will have to resign and the other member will take 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 would like to roll everything into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets immediately and move the liquid assets to the managed fund.

From that you can see how when it comes to Bankruptcy, even when one single member is running into issues, it can affect the very existence of an SMSF. If you are at the moment 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 suggested earlier, a straightforward solution to your SMSF problem 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 finding proper advice is the best 1st step. If you want to discuss your possibilities further, call us at Bankruptcy Experts Gladstone or visit our website: www.bankruptcyexpertsGladstone.com.au or just give us a call on 1300 795 575.

Bankruptcy in Gladstone - Will I lose my home if I go bankrupt?

Bankruptcy Gladstone is a complicated process, but I know from meeting with thousands facing the chance of bankruptcy over the years, that nothing at all troubles people more than the thought of losing the family house. Almost everybody is sentimentally connected to their home - it's where the children have grown up, it's where you enjoy life on a day to day base.

Will you lose your house if you go bankrupt? The answer is a resounding maybe. (not very helpful, 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 strength 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 Gladstone 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 idea.

The function of the bankruptcy trustee is to firstly agree to the regulation of the bankruptcy act 1966 (it's a very dry read about 600 pages if you are interested).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is done in a bunch of different ways but it mainly comes down to income and assets. The trustees role is to collect payments over and above your income threshold. The other role is to sell off any assets that can contribute to paying your debts.

What this sounds like is that yes the trustee will sell your house right? Not necessarily. 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 home then it's pointless to sell your home. This is happening more and more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not always reflect the price today.

A quick word of advice here if you have a house in Gladstone and are looking at Bankruptcy: get a professional 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 creating good money every month in interest out of you, month in month out, provided that you keep up to date with your fees then the bank desires you in there at all costs. Ultimately however it's not the bank's call if the trustee determines 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 jot down the value of your house and the quantity you owe on the house. A tip if you are aiming to work out the value of your house: use a registered valuer as this will give you peace of mind, don't use your neighbours' gut feel recommendations or a real estate agents advice to arrive at this figure. When you get a valuer out to your property, 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 sensitive 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 control the result. The idea is that you want a life-like 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 develop your equity position. Secondly, your house may be worth so much more than you thought. Get some guidance before carrying this out. The number of times I've met with clients that have sold their family home of 20 years simply to discover I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another significant consideration is ownership, in many cases houses are purchased 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 down to Bankruptcy, this is just one of probably numerous scenarios that are possible when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I should repeat this but get some help on this area of Bankruptcy because it is very tricky and each and every case is different.

If you really 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 Gladstone on 1300 795 575, or visit our website: www.bankruptcyexpertsGladstone.com.au.