Tuesday, August 8, 2017

Bankruptcy Toowoomba, So what is the Deal with Debts?

Just what Debts are erased if I go Bankrupt?

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

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) alongside any debts arising from uninsured Motor-vehicle claims and educational debts like HECS or FEE-HELP. These debts are not removed 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 genuine 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 erased if I file for bankruptcy?
Yes. If you have a car loan for $40,000 you can have that debt cleared away 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 could be wiped but the asset will need to be sold or returned. This is just one part that, when it comes to Bankruptcy, it is necessary to get professional assistance - like that offered at Bankruptcy Experts Toowoomba.

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 cleared away with bankruptcy. If you have a business with any form of debts find some advice because it is not always so basic. Feel free to call us here over at Bankruptcy Experts Toowoomba if you have any type of questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsToowoomba.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 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. 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 Toowoomba we specialise in business and personal debts so contact us here at Bankruptcy Experts Toowoomba if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsToowoomba.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be complicated and confusing. A question we typically get asked here at Bankruptcy Experts Toowoomba is 'what happens to my super if I apply for Bankruptcy'? The answer for most is straightforward, 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 involves Bankruptcy.



What if I have a Self Managed Super Fund?

This is a growing concern, look at the expanding 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 comes to Bankruptcy?

Remember Bankruptcy Experts Toowoomba is not suggesting this short article is the complete story, if you have any questions feel free to contact 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 indeed 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 considering Bankruptcy, you can not be a part of a SMSF. Why? Because if you are being confronted by bankruptcy, you will be labeled as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means both of these members have to also be the individual trustees. The role of trustee causes a lot of legal rules, and if you are in this position I would highly recommend you to end up being knowledgeable about 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 very harmful to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have to restructure my SMSF Fund once I'm bankrupt?

So what takes effect 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 need to consider your complete structure and ensure that it is meeting the basic conditions, including things like having a new trustee that is not dealing with issues with Bankruptcy. The Australian Tax office will give you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the very 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 constantly keeping the ATO informed of what is happening. This suggests 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 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 Toowoomba 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 obligation 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 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 will need to sell all assets right away 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 at this point facing this matter 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 proposed earlier, a basic solution to your SMSF situation is to put your super back into a normal regulated managed fund before bankruptcy and save yourself all the problems outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your options further, call us at Bankruptcy Experts Toowoomba or visit our website: www.bankruptcyexpertsToowoomba.com.au or just give us a call on 1300 795 575.

Thursday, January 19, 2017

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

Bankruptcy Toowoomba is a difficult process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that absolutely nothing concerns people more than the notion of losing the family home. Almost every person is sentimentally connected to their home - it's where the kids have grown up, it's where you take pleasure in life on a day to day basis.



Will you lose your house if you go bankrupt? The response is a resounding maybe. (not very useful, I know) People generally think 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 advantage 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 Toowoomba house, you ask? It's easier if I explain the basic principle behind the Bankruptcy process as administered by the trustee, then you'll have a more clear image.

The responsibility of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very boring 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 done in a bunch of various ways but it mainly comes down to income and assets. The trustees role is to collect payments over and above your income threshold. The further 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 necessarily. The only reason the trustee will sell off any asset including your house is to get money to repay your debts. If there is no equity in your home then it's pointless to sell your home. This is happening more and 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 Toowoomba and are looking at Bankruptcy: get an expert to help you through this process, there are plenty of variables in these scenarios that need 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 nicely lent you the money for your house is creating good money every month in interest out of you, month in month out, provided you keep up to date with your 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 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 document the value of your house and the level 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 give you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to come 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, make sure 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. 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 real sell now figure.

There are two main reasons this valuation technique is critical to you: one you will likely have peace of mind ascertaining the market value of your house, and afterwards you can easily create your equity position. Second of all, your property may be worth even more than you thought. Get some assistance before doing this. The amount of times I've met with clients that have sold their family home of 20 years just to learn I could of helped them keep it; unfortunately this happens all too often

When it concerns 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 involves Bankruptcy, this is just one of possibly 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 property in bankruptcy also. I have to repeat this but get some assistance on this area of Bankruptcy because it is very tricky and every single case is different.


If you need to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website: www.bankruptcyexpertsToowoomba.com.au.

Wednesday, November 16, 2016

Bankruptcy in Toowoomba - Who exactly do I speak to?


Should I get in touch with my accountant about Bankruptcy?
The answer seems obvious doesn't it: if anyone knows your financial circumstance well in Toowoomba, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant won't have your best interests at heart when it comes to Bankruptcy, it's that his specialization lie in helping you save you money at tax time, minimizing your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on insolvency, it's generally performed as a post graduate specialty course for those who want to work in the field. Unless your accountant is an insolvency specialist, he wouldn't know that a lot about the effects of Bankruptcy, I can guarantee you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Toowoomba, they have the tendency to be large firms with very nice offices who charge accordingly.

Should I consult my Solicitor about Bankruptcy?
No! You can speak with your solicitor in Toowoomba but more than likely it won't do you much good. Solicitors are definitely good at undertaking things lawyers do, like assisting you do your Will and buying your house and trying to keep you out of court if you're lucky. When it concerns Bankruptcy, the specialists in Toowoomba typically have either a legal or accounting experience, and the main 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 small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay an ample price for their expertise.

Should I speak with 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 fabulous option for helping you analyze your situation when it comes to Bankruptcy. If you find yourself freaking out constantly, not sleeping, not eating or over-eating and thinking of money pressures all the time, then get some help.

There are also charities around Toowoomba like Lifeline that offer an excellent service. They will be a sounding board if you just need somebody to talk about with you what your choices are. Don't let your financial trouble destroy your life - ultimately it's just money.


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

Monday, August 8, 2016

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


When people in Toowoomba come to me wanting to speak about Bankruptcy, they are typically filled 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 things more clear. One of the very most natural issues is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are an owner of a company any shape or size you can keep your business if you would like to. In Toowoomba, businesses that eventually are insolvent have a few options for example, liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some experienced advice on this 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 Toowoomba: A bankrupt can not be a director of a company, so if you have a pty ltd company you will need to resign as a director as soon as you're bankrupt.

A restriction that applies when you are bankrupt as a business owner is that you may be in your own business as a sole trader only. Generally there are things you must disclose as an aspect of that but generally you can still run your business. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. As an example, if you run a building company, your license will be suspended once you're bankrupt and as a consequence you can no longer trade without that license, so make sure you are asking the ideal questions when it comes to licenses and Bankruptcy in Toowoomba.

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 rack up heaps of debt in your company, then go bankrupt and after that open the doors the next day like nothing had happened. There are laws in place to stop what is called phoenix companies growing out of the ashes of an old company.

Having said that, it's just an issue of talking to the right people about Bankruptcy. Here in this situation you may believe you need a liquidator for your business, and you may be right, but keep in mind that every liquidator is different and have their own motives. Liquidators earn money 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 possibly risky as it can have very serious 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 incorrect advice for the other. There are some principles however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can constantly deal with your suppliers under certain conditions, the main one being you will need to meet the payment terms agreed upon.


So when it concerns Bankruptcy, don't get too confused about what you can and can't do as a business owner, just get the best advice ... If you want to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website: .bankruptcyexpertsToowoomba.com.au.

Monday, July 4, 2016

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


When it comes to Bankruptcy Toowoomba, generally people aren't aware that there can be both voluntary, and involuntary bankruptcy - both of these have distinct methods and rules.

Involuntary bankruptcy happens when someone you owe money to involves the court to declare you bankrupt. Commonly 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 requests the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the paperwork in and afterwards you are bankrupt.

You can object to 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. Other than the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply 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 process is incredible. If you think you are probable to be made bankrupt by someone, get some tips 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 an individual bankrupt you. Once you are bankrupt, it's typically far too late.

Voluntary Bankruptcy

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

This question is not the same for everybody 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 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 came 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 telephone 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 unscrupulous. The punishment doesn't seem to equate to 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 wiped off completely.

So if your credit rating is a big detail in trying to decide whether to take part 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 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 element 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 over with no strings attached. Compared to countries like the United States, our bankruptcy laws are extremely good.

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 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 except for 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 much more that can be said about this and Bankruptcy in general but the purpose 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 relates to Bankruptcy in Toowoomba, so do some research, and Good luck!


If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to consult with Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website: www.bankruptcyexpertsToowoomba.com.au.

Monday, May 23, 2016

Bankruptcy in Toowoomba - Will my income be altered if I go bankrupt?


Bankruptcy Toowoomba is a confusing process, and you have 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 significant consideration when working through when it comes to Bankruptcy.

The first thing you need to keep in mind 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 amount you earn per 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 Toowoomba like medical, child care, major travel to and from your job, or a scenario where your partner used to work but is not 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 looked at 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 pay $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.

There are much more issues involving income and what is or isn't thought of as income - if you're unsure, it's ideal to get specialist advice. The reason you should consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely 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 restrictions.

If you believe that when it comes to Bankruptcy, your situation is more complex, then just get experienced advice in Toowoomba. I may seem like a broken record, but keep in mind that it's always a great idea to overcome 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 learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Toowoomba on 1300 795 575, or check out our website: bankruptcyexpertsToowoomba.com.au.