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 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.

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

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.

Bankruptcy in Gladstone - Are you going to get bitten?

When people in Gladstone ask me about Bankruptcy, I let them know the timeless Native American Fable of the little boy and the Rattlesnake. An old rattlesnake asks a passing young boy to carry him to the mountain top to view one last sunset before he passes away. The boy was hesitant, but the rattlesnake pledged not to bite him in exchange for the ride. They journeyed together only for the snake to in the end attack the boy despite his assurance not to do so. The snake's answer was 'You knew what I was when you picked me up.

Asking for the right financial advice in Gladstone when it relates to Bankruptcy is a lot like that little boy's experience, tangled up with risk and danger, and typically skewed for the benefit of the person offering the advice. In most cases you'll get bitten except if you know what you've picked up before you move forward (avoid the rattlesnakes). I discovered the problem with receiving financial advice as a teenager, and it has been central to Bankruptcy. I'd been working hard for a few years, and saved up a little bit of money I wanted to invest. It was the early 1980s so interest rates were very high and investing your money was quite profitable. I spent a long time researching different investment options, and I went to visit a few financial advisors. It was clear that they had more money than I did: they had great suits and plush offices, they all appeared to exude confidence and have all the answers. What struck me was that they all had an extremely different strategy of what I should do. This frustrated me so much that it put me off the whole idea of opting for any of them.

I'm sure by now you have read more than enough on the internet to be totally baffled about Bankruptcy and exactly what to do. It would undoubtedly be easier for me to help you comprehend the nature of the financial snakes you may be picking up while you are attempting to get to the bottom of your financial concerns in Gladstone. Essentially, you need to try and recognize what your overarching choices are, do your very own research into where to proceed with your strategy for Bankruptcy, and then approach what you feel is best in Gladstone for your needs. Essentially, you have 3 options for who to turn to.

The first option is a Solicitor - This may appear like the go-to option when you appear to be in trouble. But there certainly is only so much help they can give on this matter. There are certainly specialist legal advisors in bankruptcy, but their experience features a hefty price.

Another choice you may think about is your accountant - they are incredibly helpful and vital to the process of managing your business, but for the most part, when you are thinking about Bankruptcy, your accountant won't be much help to you any more.

Your best bet? A Financial Counsellor that can talk about debt consolidation, personal insolvency agreements, and pretty much all you need to understand when it comes to Bankruptcy.

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

Bankruptcy in Gladstone - Choices, Choice, Choices

 When it comes down to Bankruptcy Gladstone, there are a bunch of choices that we get given depending upon who we are, who we talk with, and what exactly has gone wrong. Among the most common confusion I see with Bankruptcy is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Gladstone, a lot of the related information you receive on this issue will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, I can assure you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very simple way: charging you a fee for aiding you wrap each one of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but they aren't going to be doing it for free. Please do not misunderstand me: if you believe your financial problems in Gladstone can be fixed by paying less interest, then go ahead and investigate the possibilities. Even a small amount of interest saved over years easily adds up.

Usually I find if you are reading this blog you've undoubtedly tried to consolidate your debts already and come to the following realisations like these:

• Your credit rating is no good, and your credit file definitely has nonpayments on it so no one will offer you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving a bit of interest just won't make a lot of difference,.

• You've probably reached the stage where you've had enough, you're mentally drained, you can't go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

So when it comes to Bankruptcy in Gladstone, what's the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Flexibility is the main thing Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - may I add - regulated trustee including the government trustee ITSA, and not a private firm that advertises on TV. Ultimately this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they arrange a deal in your place. You can offer a lump sum settlement figure or enter into a payment plan, or you can offer them assets as an alternative to cash. This might sound fine when it comes to the issues with Bankruptcy - that is up until you realise that one of the challenges with PIA's is that 75 % of the people you owe money to have to come to an understanding the deal. If they don't, your plan is rejected or needs to be renegotiated.

Generally the people you owe money really want all their money back plus interest. Sometimes they'll go for beneath the amount you owe them - it's normally a percentage of the debt - but allow me to stress this aspect: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will in fact settle for.

In many cases you'll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is agreed upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've come across creditors going for less 80 % on rare occasions, but that usually only occurs with a public company going into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of shrewd lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Gladstone aren't going to get that lucky!

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