Monday, August 7, 2017

Bankruptcy Newcastle, Just what is the Deal with Debts?

Precisely what Debts are eliminated if I go Bankrupt?

The straightforward answer is that when it concerns Bankruptcy most debts are wiped, and I have also included a summary below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) and also any debts arising from uninsured Motor-vehicle claims and educational debts for instance, HECS or FEE-HELP. These debts are not wiped out 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 genuine 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 removed 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 needs to be sold or returned. This is just one element that, when it comes to Bankruptcy, it is essential to get professional guidance - like that available at Bankruptcy Experts Newcastle.

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 erased with bankruptcy. If you have a business with any type of debts get some advice because it is not always so self-explanatory. Feel free to call us here at Bankruptcy Experts Newcastle if you have any questions on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsNewcastle.com.au

What about my business or Company debts?

In some cases 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. Typically 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 Newcastle we specialise in business and personal debts so contact us here at Bankruptcy Experts Newcastle if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsNewcastle.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be involved and confusing. A question we commonly get asked here at Bankruptcy Experts Newcastle is 'what happens to my super if I declare Bankruptcy'? The answer for most is simple, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely nothing 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, think about the developing number of members of Self-Managed Super Funds ("SMSFs") lately; 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 Newcastle is not indicating 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 in fact we suggest you obtain both legal and financial advice before proceeding with any of the actions proposed 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 coping with bankruptcy, you will be identified 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 will need to also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this role I would highly encourage you to be aware of them all-- for example 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 quite 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 after I'm bankrupt?

So what comes to pass 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 have to consider your overall structure and make certain it is meeting the basic conditions, involving having a new trustee that is not dealing with issues with Bankruptcy. The Australian Tax office will provide you a 6 month 'grace period' to get this done before you face penalties. And consider, 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 means you have to let them know that you have a bankruptcy complication 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 need to also notify ASIC of their resignation.

Over 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 Newcastle 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 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 clear away the property and halve the proceeds. They would then need to decide if they choose 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 definitely need to sell all assets immediately and transfer the liquid assets to the managed fund.

From this 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 already 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 proposed earlier, a straightforward 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 receiving proper advice is the best 1st step. If you want to discuss your possibilities further, give us a call at Bankruptcy Experts Newcastle or visit our website: www.bankruptcyexpertsNewcastle.com.au or just give us a call on 1300 795 575.

Wednesday, January 11, 2017

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

Bankruptcy Newcastle is a difficult to understand process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that not a thing troubles people more than the notion of losing the family home. Almost everyone is on an emotional level connected to their home - it's where the kids have grown, it's where you enjoy life on a day to day basis.

Will you lose your house if you go bankrupt? The reply is a resounding maybe. (not very helpful, I know) People typically believe 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 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 Newcastle house, you ask? It's easier if I explain the basic guideline behind the Bankruptcy process as administered by the trustee, then you'll have a clearer image.

The responsibility of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very plain read about 600 pages if you are serious).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is accomplished in a bunch of diverse ways but it mainly comes down to income and assets. The trustees role is to collect payments over your income threshold. The other role is to sell off any assets that can contribute to paying your debts.

What this seems 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 on your property then it's pointless to sell your home. This is happening increasingly since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not necessarily reflect the price today.

A quick word of advice here if you have a house in Newcastle 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 have to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they want 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 desires you in there at all costs. Essentially however it's not the bank's call if the trustee establishes 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 mark the value of your house and the quantity you owe on the house. A tip if you are attempting 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 tips or a real estate agents advice to reach this figure. When you get a valuer out to your home, make certain you tell the valuer to value the property for a quick sale, see to it 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 control the result. The idea is that you want a sensible sell now figure.

There are two main reasons this valuation system is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, then afterwards you can easily develop your equity position. Second of all, your house may be worth so much more than you thought. Get some advice before carrying this out. The number of times I've seen clients that have sold their family home of 20 years just to discover I could of helped them keep it; unfortunately this happens all too often

When it concerns Bankruptcy and houses, another big consideration is ownership, in many cases 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 doesn't, the equity is only factored on the 50 % of the property.

When it relates to Bankruptcy, this is just one of possibly hundreds of 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 property in bankruptcy also. I should repeat this but get some assistance on this area of Bankruptcy because it is very tricky 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 call Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsNewcastle.com.au.

Wednesday, November 16, 2016

Bankruptcy in Newcastle - Who do I speak to?



Should I talk to my accountant about Bankruptcy?
The answer seems clear doesn't it: if anybody knows your financial situation well in Newcastle, 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 at heart when it comes to Bankruptcy, it's that his proficiency lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on bankruptcy, it's generally carried out as a post graduate speciality program for those who intend to work in the field. Unless your accountant is an insolvency specialist, he won't know that a lot about the effects 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 Newcastle, they tend to be large firms with very nice offices who charge accordingly.

Should I talk with my Solicitor about Bankruptcy?
No! You can speak to your solicitor in Newcastle but more than likely it won't do you much good. Solicitors are certainly good at carrying out 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 concerns Bankruptcy, the specialists in Newcastle often have either a legal or accounting background, 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 like there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay a sizeable price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?
Yes! There are plenty of financial counselling services to assist you through this, they have no hidden agendas and they're a wonderful option for letting you think through your situation when it comes to Bankruptcy. If you are stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures continuously, then get some help.

There are also charitable organizations around Newcastle like Lifeline that offer a wonderful service. They will be a sounding board if you just need someone to talk about with you what your possibilities are. Don't let your financial trouble destroy your life - in the end it's just money.


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 Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsNewcastle.com.au.

Monday, August 8, 2016

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


When people in Newcastle come to me looking to discuss Bankruptcy, they are typically packed with questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make it clearer. One of the most basic troubles is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are a manager of a business any shape or size you can keep your business if you wish to. In Newcastle, businesses that end up being insolvent have a few options for instance, liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complex 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 goes bankrupt. There are several crucial implications for directors of companies when it comes to Bankruptcy in Newcastle: A bankrupt can not be a director of a company, so if you have a pty ltd company you definitely will need to resign as a director after you're bankrupt.

A limitation that applies when you are 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 need to make known as an aspect of that but essentially you can still run your company. 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 best questions when it comes to licenses and Bankruptcy in Newcastle.

However 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 company, then go bankrupt then open the doors the next day like almost nothing had happened. There are laws in place to prevent what is called phoenix companies popping up out of the ashes of an old business.

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

When it comes to Bankruptcy, I consider that giving generic advice in this area is essentially damaging as it can have very substantial implications for directors and business owners. This is considering that it is just one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some principles however, that you may benefit from. There is no restriction to the size of the business you run though you are bankrupt. You can employ staff. You can continue to deal with your providers 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 too worried about what you can and can't do as a business owner, just get the best 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 get in touch with Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsNewcastle.com.au.

Monday, July 4, 2016

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


When it comes to Bankruptcy Newcastle, usually people aren't aware that there are both voluntary, and involuntary bankruptcy - both have unique approaches and guidelines.

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 particular 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 issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documents in and after that you are bankrupt.

You can object to a bankruptcy notice by going to court 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 fact no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're administered 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 help and act on that advice. Generally I've found it's always more ideal to know what you can and can't do before you have a person bankrupt you. Once you are bankrupt, it's usually too late.

Voluntary Bankruptcy

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

This question is not the very same for every person of course, but usually I find that one way you could work it out is to figure out just how long it will take you to pay each one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may really help you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who came 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 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 company will default your credit file. That default will remain on your file for 5 years, so for $30 you can have your credit file seriously 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 unjust. The punishment doesn't seem to equal the crime in my book. So if you currently have defaults on your credit report for 5 years, keep 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 factor 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 still have it on your file for 7 years.

Bankruptcy

I have talked about the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part more people are afraid of when they come to me to discuss their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific country the arrangements 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 quite reasonable.
I don't claim to know why that is but a couple of hundred years ago debtors went to prison. Nowadays I suppose the government finds that 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 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, bear in mind that there are always possibilities when it relates to Bankruptcy in Newcastle, so do some homework, and Good luck!


If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to check with Bankruptcy Experts Newcastle on 1300 795 575, or visit our website:bankruptcyexpertsNewcastle.com.au.

Monday, May 23, 2016

Bankruptcy in Newcastle - Will my income be changed if I go bankrupt?


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

The first thing you need to know about this area of Bankruptcy is the amount 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 portion you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can get a hardship variation that raises the threshold amount, if you have costs in Newcastle such as medical, child care, considerable travel to and from your job, or a situation where your partner used to work but is no longer able to contribute to the household income.

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

There are much more issues surrounding income and what is or isn't considered income - if you're not exactly sure, it's a good idea to get specialist advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely be taken by the ATO whilst you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund provided that doesn't take you over your threshold income limitations.

If you believe that when it comes to Bankruptcy, your circumstance is more challenging, then just get specialist advice in Newcastle. I may seem like a broken record, but bear in mind that it's always a smart idea to work through these options before declaring bankruptcy, due to the fact that once you have filed the paperwork it's too late to change your mind.


If you want to find out more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Newcastle on 1300 795 575, or go to our website:bankruptcyexpertsNewcastle.com.au.