Monday, August 7, 2017

Bankruptcy Hobart, Just what is the Deal with Debts?

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 added a chart below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) and any debts arising from uninsured Motor-vehicle claims and educational debts for instance, HECS or FEE-HELP. These debts are not eliminated 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 absolute security affixed to it. So for instance if you buy a new car for $40,000 dollars the security for that 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 might be wiped but the asset needs to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is vital to get professional help - like that provided at Bankruptcy Experts Hobart.

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 easy. Feel free to call us here over at Bankruptcy Experts Hobart if you have any questions on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsHobart.com.au

What about my business or Company debts?

Sometimes when it comes to Bankruptcy we can assist you with your business debts, call us about this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may need 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 Hobart we specialise in business and personal debts so give us a call here at Bankruptcy Experts Hobart if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsHobart.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be involved and perplexing. A question we typically get asked here at Bankruptcy Experts Hobart is 'what happens to my super if I declare Bankruptcy'? The reply for most is straightforward, if your super is in a regulated fund or industry fund like Sunsuper or Host Plus then virtually nothing happens; your super is 100 % safe when it comes down to Bankruptcy.



What if I have a Self Managed Super Fund?

This is a growing concern, look at the developing number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has expanded Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it concerns Bankruptcy?

Remember Bankruptcy Experts Hobart is not proposing this short article is the whole story, if you have any questions feel free to call us on 1300 795 575. No matter if 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 seek both legal and financial advice before proceeding with any of the actions recommended in this article.

What is a Disqualified Person?

First and foremost, if you are considering Bankruptcy, you can not be a part of a SMSF. Why? Because if you are being confronted by bankruptcy, you will be classified as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means the two of these members have to also be the individual trustees. The duty of trustee poses a lot of legal rules, and if you are in this role I would highly urge you to be 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 rather 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 to restructure my SMSF Fund after I'm bankrupt?

So what develops if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will have to be reorganized. This means that you will need to consider your whole structure and make certain 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 bear in mind, sometimes the very best plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale restructuring issues, there is a lot of paperwork to deal with too, and you need to be continuously keeping the ATO informed of what is happening. This means you need to let them know that you have a bankruptcy problem with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also need to inform the ATO using the form NAT 3036 (Found on the ATO website) and they will need to also notify ASIC of their resignation.

During the course of 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 Hobart for some free advice on 1300 795 575.

What if I use a single member fund?

If you are a single member fund, then you will need to appoint a new director, and it will then become their duty to oversee the sale and relocation of assets into a managed fund. If there are two or more members, than the bankrupt member will need to resign and the other member will 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 as soon as possible and move the liquid assets to the managed fund.

From this you can see how when it comes to Bankruptcy, even if one single member is dealing with issues, it can affect the very existence of an SMSF. If you are at this point facing this trouble yourself, or with a partner in a SMSF, please seek financial advice to make certain you are meeting the ATO requirements.

A simple solution ...


As I suggested earlier, a basic 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 problems outlined above. Bankruptcy is never easy, but finding proper advice is the best first step. If you want to discuss your options further, contact us at Bankruptcy Experts Hobart or visit our website: www.bankruptcyexpertsHobart.com.au or just call us on 1300 795 575.

Wednesday, January 18, 2017

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


Bankruptcy Hobart is a challenging process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that absolutely nothing concerns people more than the idea of losing the family home or apartment. Almost everyone is emotionally connected to their home - it's where the children have grown up, it's where you take pleasure in life on a day to day base.


Will you lose your house if you go bankrupt? The response is a resounding maybe. (not very useful, I know) People typically imagine it's an inevitable consequence and a part of Bankruptcy, and therefore 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 agreed to pay back the debt you are in.

So how is it possible to keep my Hobart 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 more clear picture.

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

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is carried out in a bunch of assorted ways but it mainly comes down to income and assets. The trustees role is to collect payments beyond your income threshold. The further role is to sell off any assets that can contribute to fixing 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 off any asset including your house is to get money to pay back your debts. If there is no equity in your home then it's pointless to sell your home. This is happening increasingly 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 Hobart and are looking at Bankruptcy: get a skilled professional to help you through this process, there are a number of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they like to sell your house and not take the risk? The bank that has nicely lent you the money for your house is generating good money every month in interest out of you, month in month out, just as long as you keep up to date with your payments then the bank desires you in there at all costs. Essentially however it's not the bank's call if the trustee establishes that there is loads 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 make a note of the value of your house and the amount of money 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 provide you peace of mind, don't use your neighbours' gut feel recommendations or a real estate agents advice to come to this figure. When you get a valuer out to your property, ensure that you tell the valuer to value the property for a quick sale, ensure you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to provide two valuations: one for a quick sale and one for a well marketed non time delicate sale. Nowadays that's not the case, but if you meet them and let them know you need to sell your home in the next 30 days you may sway the result. The idea is that you want a sensible sell now figure.

There are two reasons this valuation system is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, and after that you can easily build your equity position. Second of all, your property may be really worth a lot more than you thought. Get some assistance before carrying this out. The amount of times I've seen clients that have sold their family home of 20 years only to discover I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another major consideration is ownership, in many cases houses are acquired in joint names. In other words 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 comes to Bankruptcy, this is just one of potentially hundreds of scenarios that are likely when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the house in bankruptcy also. I should repeat this but get some assistance on this area of Bankruptcy because it is very tricky and every single case is different.


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

Wednesday, November 16, 2016

Bankruptcy in Hobart - Who exactly do I speak to?


Should I consult with my accountant about Bankruptcy?
The answer seems obvious doesn't it: if anybody knows your financial circumstance well in Hobart, 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 in mind when it comes to Bankruptcy, it's that his knowledge lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will devote hardly any to no time on bankruptcy, it's generally performed as a post graduate specialty program for those who wish to work in the field. Unless your accountant is an insolvency expert, he wouldn't know that a lot about the implications of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Hobart, they often tend to be large firms with very nice offices who charge accordingly.

Should I speak to my Solicitor about Bankruptcy?
No! You can speak to your solicitor in Hobart but more than likely it won't do you much good. Solicitors are really good at undertaking things lawyers do, like helping you do your Will and buying your house and trying to keep you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Hobart typically have either a legal or accounting qualifications, and the reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

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

Should I speak with a financial counsellor about Bankruptcy?
Yes! There are lots of financial counselling services to assist you with this, they have no hidden agendas and they're a fantastic option for helping you analyze your circumstance when it comes to Bankruptcy. If you find yourself stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures constantly, then get some help.
There are also charitable organizations around Hobart 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 options are. Don't let your financial issue destroy your life - ultimately it's just money.


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

Monday, August 8, 2016

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


When people in Hobart come to me looking to talk about Bankruptcy, they are usually loaded with questions. The internet is full of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make it more clear. One of the most frequent matters is 'Will I lose my business if I declare bankruptcy?' The concise 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 Hobart, businesses that are insolvent have a few options such as liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complicated area so get some professional 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 Hobart: A bankrupt can not be a director of a company, so if you have a pty ltd company you will need to retire as a director once you're bankrupt.

A limitation that applies when you are actually bankrupt as a business owner is that you may be in your very own business as a sole trader only. There are things you need to reveal as an aspect of that but generally you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. Such as, 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 best questions when it comes to licenses and Bankruptcy in Hobart.

Having said that if your business is not impacted directly by such issues, then you'll have to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your business, then go bankrupt and afterwards open the doors the next day like practically nothing had happened. There are laws in place to avoid what is called phoenix companies popping up out of the ashes of an old company.

Having said that, it's just a point of talking with the best people about Bankruptcy. In this circumstance you may believe you need a liquidator for your company, and you might be right, but keep in mind that every liquidator is varied and have their own motives. Liquidators make money from your liquidation - heaps of money - so exactly what advice do you believe you will get?

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


So when it comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the right advice ... If you wish to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Hobart on 1300 795 575, or visit our website: .bankruptcyexpertsHobart.com.au.

Monday, July 4, 2016

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


When it comes to Bankruptcy Hobart, typically people aren't aware that there may be both voluntary, and involuntary bankruptcy - the two have unique approaches and guidelines.

Involuntary bankruptcy happens when someone you owe money to involves the court to declare you bankrupt. Usually when you get one of these kinds of notices, you have 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the paperwork in then afterwards you are bankrupt.

You can challenge a bankruptcy notice by going to court right after the 21 days have expired and put your case forward, to prevent it going to the next level. Apart from the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're administered to in the exact same way.

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

Voluntary Bankruptcy

On the other hand, when it comes to Bankruptcy, sometimes there are moments that it is the most ideal option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for each 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 all 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 rate she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and fail to remember to pay your $30 phone bill for 6 months more, it's very likely the phone service will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file truly damaged for that period of time - and all of this will impact how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is wrong. 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, bear in mind 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 variation is that with a DA or PIA you repay the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have mentioned 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 review their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared to countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a couple of hundred years ago debtors went to prison. These days I suppose the government feels 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 every one 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 take care of a car accident if the car was not actually insured.

There is a lot more that can be said about this and Bankruptcy in general but the objective 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 choices when it comes to Bankruptcy in Hobart, so do some study, and Good luck!


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

Monday, May 23, 2016

Bankruptcy in Hobart - Will my income be affected if I go bankrupt?


Bankruptcy Hobart is a confusing process, and you need to ensure you get the right advice. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have to know about going bankrupt is there is no rule on how much you can earn. However, I will say that your income is a serious consideration when working through when it comes to Bankruptcy.

The first thing you need to understand about this area of Bankruptcy is how much you can earn before you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand amount of money you earn annually. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).
You can make an application for a hardship variation that increases the threshold amount, if you have financial commitments in Hobart such as medical, child care, sizable travel to and from work, or a situation where your partner used to work but is not able to contribute to the family income.

Some of the informative parts of Bankruptcy is that your employer will not be informed when you file for bankruptcy. Also, Child support is always taken into consideration in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you give $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

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

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

If you believe that when it comes to Bankruptcy, your case is more intricate, then simply get expert advice in Hobart. I may sound like a broken record, but bear in mind that it's always a good idea to overcome these options before declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.


If you want to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Hobart on 1300 795 575, or explore our website: bankruptcyexpertsHobart.com.au.