Bankruptcy Port Macquarie, So what is the Deal with Debts?

Exactly what Debts are wiped out if I go Bankrupt?

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

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) along with any debts arising from uninsured Motor-vehicle claims and educational debts like HECS or FEE-HELP. These debts are not erased when you file for bankruptcy.

What about Secured Debts?

A secured debt is a car loan or a home loan; it is a debt that has some 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 may be wiped but the asset must be sold or returned. This is just one element that, when it comes to Bankruptcy, it is essential to get professional advice - like that available at Bankruptcy Experts Port Macquarie.

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 cleared away with bankruptcy. If you have a business with any sort of debts receive some advice because it is not always so basic. Feel free to call us here at Bankruptcy Experts Port Macquarie if you have any type of questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsPortMacquarie.com.au

What about my business or Company debts?

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

Bankruptcy, Will I lose my Superannuation?

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

What if I have a Self Managed Super Fund?

This is a growing concern, consider the evolving number of members of Self-Managed Super Funds ("SMSFs") in recent years; the ATO tells us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it involves Bankruptcy?

Remember Bankruptcy Experts Port Macquarie is not implying this post is the entire story, if you have any questions feel free to get in touch with us on 1300 795 575. Whether you call us or someone else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we highly recommend you seek both legal and financial advice before proceeding with any of the actions indicated 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 classified as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem due to the fact that usually most of the SMSFs are just 2 people, which means both of these members have to also be the individual trustees. The job of trustee presents a lot of legal rules, and if you are in this role I would highly recommend you to become knowledgeable about them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can see how an individual bankruptcy can be rather damaging to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

How long do I have so as to restructure my SMSF Fund once I'm bankrupt?

So what happens 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 entire structure and ensure that it is meeting the basic conditions, including having a new trustee that is not experiencing issues with Bankruptcy. The Australian Tax office will supply 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 constantly keeping the ATO informed of what is happening. This means you will need to let them know that you have a bankruptcy issue with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they 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 uncertain call Bankruptcy Experts Port Macquarie 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 be 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 want to decide if they would like to remain as a single member SMSF, or if they would like to roll it all into a managed fund. If both members are entering bankruptcy, then they would definitely need to sell all assets promptly and move the liquid assets to the managed fund.

From that you can see how when it comes to Bankruptcy, even though one single member is facing issues, it can affect the very existence of an SMSF. If you are at the moment facing this problem yourself, or with a partner in a SMSF, please seek financial advice to make sure you are fulfilling the ATO requirements.

A simple solution ...

As I suggested earlier, a simple solution to your SMSF situation 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 receiving proper advice is the best initial step. If you want to discuss your possibilities further, give us a call at Bankruptcy Experts Port Macquarie or visit our website: www.bankruptcyexpertsPortMacquarie.com.au or just call us on 1300 795 575.

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

Bankruptcy Port Macquarie is a difficult process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that nothing at all concerns people more than the idea of losing the family home. Almost every person is emotionally connected to their home - it's where the children have grown, it's where you appreciate life on a day to day base.

Will you lose your house if you go bankrupt? The answer is a resounding maybe. (not very useful, I know) People typically feel it's an inevitable consequence and a part of Bankruptcy, and because of this 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 benefit 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 Port Macquarie house, you ask? It's easier if I explain the basic idea behind the Bankruptcy process as administered by the trustee, then you'll have a more clear idea.

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

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

What this seems like is that yes the trustee will sell your house right? Not normally. 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 areas have been heading south so what you paid 4 years ago may not actually reflect the price today.

A quick tip here if you have a house in Port Macquarie and are looking at Bankruptcy: get an expert to help you through this process, there are a number of variables in these scenarios that have 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 generously 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 wants you in there at all costs. Ultimately however it's not the bank's call if the trustee establishes that there is plenty 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 note 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 offer you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to arrive at this figure. When you get a valuer out to your home, ensure that 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 offer two valuations: one for a quick sale and one for a well marketed non time delicate sale. These days that's not the case, but if you meet them and tell them you need to sell your home in the next 30 days you may control the result. The idea is that you want a sensible sell now figure.

There are two reasons this valuation technique is critical to you: one you may have peace of mind ascertaining the market value of your house, and after that you can easily establish your equity position. Second of all, your property may be worth much more than you thought. Get some guidance before doing this. The number of times I've seen clients that have sold their family home of 20 years simply to find out 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, often houses are bought in joint names. To puts it simply 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 down to Bankruptcy, this is just one of likely numerous scenarios that are likely when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the house in bankruptcy also. I have to repeat this but get some help on this area of Bankruptcy because it is very tricky and every single case is different.

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Port Macquarie on 1300 795 575, or visit our website: www.bankruptcyexpertsPortMacquarie.com.au.