Bankruptcy Sunshine Coast, So what is the Deal with Debts?

Just what Debts are removed if I go Bankrupt?

The simple answer is that when it concerns Bankruptcy most debts are wiped, and I have featured a chart 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 example, 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 real security connected to it. So for example 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 erased if you simply hand back 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 has to be sold or returned. This is just one element that, when it comes to Bankruptcy, it is necessary to get professional help - like that you can find at Bankruptcy Experts Sunshine Coast.

What about my Tax Debts with the ATO can they be erased 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 kind of debts receive some advice because it is not always so self-explanatory. Feel free to call us here at Bankruptcy Experts Sunshine Coast if you have any questions on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsSunshineCoast.com.au

What about my business or Company debts?

In some cases 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. Typically you may need to liquidate a company to deal with the debt this way. And 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 Sunshine Coast we specialise in business and personal debts so contact us here at Bankruptcy Experts Sunshine Coast if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsSunshineCoast.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and difficult to understand. A question we often get asked here over at Bankruptcy Experts Sunshine Coast is 'what happens to my super if I file for Bankruptcy'? The reply for most is straightforward, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then nothing at all happens; your super is 100 % safe when it involves Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, take into consideration the growing number of members of Self-Managed Super Funds ("SMSFs") in 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 comes to Bankruptcy?

Remember Bankruptcy Experts Sunshine Coast is not implying this short article 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 another person it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF indeed we recommend you look for 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 considering 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 individual cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means each of these members must also be the individual trustees. The job of trustee causes a lot of legal rules, and if you are in this position I would highly urge you to end up being familiar with 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 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 to restructure my SMSF Fund once I'm bankrupt?

So what develops if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will need to be reorganized. This means that you will want to consider your extensive structure and ensure that it is meeting the basic conditions, involving 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 consider, sometimes the best 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 frequently keeping the ATO informed of what is happening. This suggests you have 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.

In 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 unsure call Bankruptcy Experts Sunshine Coast 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 responsibility to oversee the sale and transfer 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 clear away the property and halve the proceeds. They would then have to decide if they would like 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 would need to sell all assets as soon as possible and transfer the liquid assets to the managed fund.

From that you can notice how when it comes to Bankruptcy, even when one single member is dealing with issues, it can affect the very existence of an SMSF. If you are at the moment facing this trouble 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 recommended earlier, a simple solution to your SMSF issue 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 getting proper advice is the best first step. If you want to discuss your options further, contact us at Bankruptcy Experts Sunshine Coast or visit our website: www.bankruptcyexpertsSunshineCoast.com.au or just call us on 1300 795 575.

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

Bankruptcy Sunshine Coast is a tricky process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that nothing worries people more than the thought of losing the family home. Almost every person is sentimentally connected to their home - it's where the kids have grown, it's where you take pleasure in life on a day to day basis.

Will you lose your home if you go bankrupt? The response is a resounding maybe. (not very useful, 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 perk 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 Sunshine Coast house, you ask? It's easier if I explain the basic theory behind the Bankruptcy process as administered by the trustee, then you'll have a more clear image.

The function of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very boring 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 distinct 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 any assets that can contribute to repaying your debts.

What this sounds like is that yes the trustee will sell your house right? Not always. 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 much more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not automatically reflect the price today.

A quick tip here if you have a house in Sunshine Coast and are looking at Bankruptcy: get an expert to help you through this process, there are plenty of variables in these scenarios that should be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they hope to sell your house and not take the risk? The bank that has generously lent you the money for your house is making good money every month in interest out of you, month in month out, as long as you keep up to date with your monthly payments then the bank wants you in there at all costs. Essentially 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 make a note of 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 advice or a real estate agents advice to get to this figure. When you get a valuer out to your house, make certain 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 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 tell them you need to sell the house in the next 30 days you may control the result. The idea is that you want a realistic sell now figure.

There are two main reasons this valuation technique is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, then afterwards you can easily develop your equity position. Secondly, your property may be worth a lot more than you thought. Get some tips before carrying this out. The number of times I've met clients that have sold their family home of 20 years simply to figure 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, in most cases houses are acquired 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 does not, the equity is only factored on the 50 % of the property.

When it comes down to Bankruptcy, this is just one of potentially numerous scenarios that are possible when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I need to repeat this but get some guidance on this area of Bankruptcy because it is very tricky and every 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 speak with Bankruptcy Experts Sunshine Coast on 1300 795 575, or visit our website: www.bankruptcyexpertsSunshineCoast.com.au.