Tuesday, August 8, 2017

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

Monday, May 22, 2017

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.

Wednesday, January 25, 2017

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.

Thursday, November 17, 2016

Bankruptcy in Gladstone - Who do I speak to?



Should I talk with my accountant about Bankruptcy?
The answer seems obvious doesn't it: if anyone knows your financial situation well in Gladstone, 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 at heart when it comes to Bankruptcy, it's that his know-how lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will devote very little to no time on insolvency, it's generally done as a post graduate speciality course for those who wish to work in the field. Unless your accountant is an insolvency expert, he would not know that a lot about the implications of Bankruptcy, I can guarantee you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Gladstone, they have the tendency to be large firms with very nice offices who charge accordingly.

Should I talk to my Solicitor about Bankruptcy?
No! You can talk with your solicitor in Gladstone but more than likely it won't do you much good. Solicitors are certainly good at doing things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Gladstone often tend to have either a legal or accounting qualifications, and the main reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner until you have a law or accounting degree.

Just as there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay a considerable price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?
Yes! There are lots of financial counselling services that can help you with this, they have no hidden agendas and they're an amazing option for helping you think through your circumstance when it comes to Bankruptcy. If you find yourself freaking out constantly, not sleeping, not eating or over-eating and thinking about money pressures continuously, then get some help.

There are also charitable organizations around Gladstone like Lifeline that offer a remarkable service. They will be a sounding board if you just need someone to go over with you what your alternatives are. Don't let your financial trouble 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 questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Gladstone on 1300 795 575, or visit our website: www.bankruptcyexpertsGladstone.com.au.

Tuesday, August 9, 2016

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


When people in Gladstone come to me seeking to talk about Bankruptcy, they are constantly full of questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things more clear. One of the very most simple concerns is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are an owner of a company any shape or size you can maintain your business if you would like to. In Gladstone, businesses that become insolvent have a few options just like liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

Bankruptcy is a complex area so get some experienced advice on this one if you have a business. Generally speaking, the debts in a business and personal debts go hand in hand when a business owner declares bankruptcy. There are a few vital implications for directors of companies when it comes to Bankruptcy in Gladstone: A bankrupt can not be a director of a company, so if you have a pty ltd company you will likely need to resign as a director as soon as you're bankrupt.

A constraint 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. Generally there are things you will want to disclose as an aspect of that but in a nutshell you can still run your business. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. For example, 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 appropriate questions when it comes to licenses and Bankruptcy in Gladstone.

But 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 acquire heaps of debt in your business, then go bankrupt and after that open the doors the next day like not a thing had happened. There are laws in place to avoid what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just a point of speaking with the best people about Bankruptcy. In this situation you may believe you need a liquidator for your business, and you could be right, but remember that every liquidator is varied and have their own motives. Liquidators profit from your liquidation - heaps of money - so what advice do you believe you will get?

When it comes to Bankruptcy, I think that giving generic advice in this area is essentially perilous as it can have very significant implications for directors and business owners. This is because it is just one of those cases where what the right guidance for one business owner is the wrong advice for the other. There are some basics however, that you may benefit from. There is no limitation to the size of the business you run when you are bankrupt. You can employ staff. You can continue to deal with your companies 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 stressed about what you can and can't do as a business owner, just get the appropriate advice ... If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to consult Bankruptcy Experts Gladstone on 1300 795 575, or visit our website: .bankruptcyexpertsGladstone.com.au.

Wednesday, July 6, 2016

Bankruptcy in Gladstone - Changes to help Small Business and Entrepreneurs



Do you recognize how much Bankruptcy Gladstone is changing? The Australian Government at the end of 2015 put forward 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. Right now, there is a minimum amount of time that you must remain bankrupt, having said that, this 3 year period may in fact be reduced to just 12 months. So if you are asking about Bankruptcy, this news may be pretty 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 modifications to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding 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 debate about this Bankruptcy issue in Gladstone that some make is that this variation will only motivate fraudulent behavior opening pandora's box so to speak for the unscrupulous to abuse of the bankruptcy system. We have looked at the minimum, but on the other side of the matter, The government is not recommending to change the maximum term of 8 years if it deems a bankrupt has operated in an unethical or fraudulent way, and there are no proposals to change the repercussions of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As an insolvency professional in Gladstone, I have a reasonable share of knowledge when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Gladstone I have never uncovered someone abusing the system or acting in a reckless way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur look at the very tough task of bankruptcy, not once have I perceived they are happy about it. The average small business owner or entrepreneur in Gladstone does not start out taking enormous financial risks with the intent to fail. The media prefers citing the apparent misuse 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 best and brightest in Gladstone not get kicked out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, employers keeping this country going.

Certainly there is a fine line with the things the government is trying to do here, because they are trying to balance helping people who have made decisions out of their control, and dissuading people from making problems that land them in trouble and as a result an issue of Bankruptcy. However you likewise don't want to eliminate the experience and knowledge that business owners have. You absolutely don't want to shatter people simply because they have had a genuine failure in a large or small start-up project that has not succeeded.

At the big end of town large 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 liable in an insolvency arrangement if the new venture doesn't work out.

The government's proposed 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I can not imagine, that these variations will be detrimental to Australia's economy, in reality these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health sector because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Gladstone not a day passes where I don't find out the tragic stories of relationship failures, thoughts of suicide and the list goes on.


Bankruptcy helps save lives, and it could save yours. If you really need some help with your debts in Gladstone or are just thinking of Bankruptcy, don't hesitate to phone us here at Bankruptcy Experts Gladstone on 1300 795 575, or visit our website: bankruptcyexpertsgladstone.com.au

Monday, July 4, 2016

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


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

Involuntary bankruptcy occurs when a person you owe money to applies to the court to declare you bankrupt. Usually when you get one of these types of notices, you have actually 21 days to pay all the debt. If you do not, 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 documents in and then you are bankrupt.

You can contest a bankruptcy notice by going to court following 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 fact no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're conducted to in the same way.

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are prone to be made bankrupt by someone, get some guidance 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 normally far too late.

Voluntary Bankruptcy

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

This question is not the very same for every person of course, but more often than not I find that one way you could work it out is to figure out just how long it will take you to pay every one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may serve to help 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 overlook 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 truly damaged for that period of time - and all of this will impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is not fair. The punishment doesn't seem to equal the crime in my book. So if you already 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 aspect in trying to decide whether to participate 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 change 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 stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element more people are afraid of when they come to me to go over 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. As compared to countries like the United States, our bankruptcy laws are very reasonable.

I don't pretend to know why that is but a few 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 costs the taxpayer anyway.

Bankruptcy wipes all of your debts including ATO debts with the exception of 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 actually insured.

There is far more that can be said about doing this and Bankruptcy in general but the objective of this blog was to help you decide between a few available options. When getting some advice, always remember that there are always possibilities when it relates to Bankruptcy in Gladstone, so do some investigation, and Good luck!


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